Are we urban enough?

Rapid urbanization is a key feature of economies that has sustained a growth of 8-10%. In South Korea, urban population as a proportion of total population rose from 28.8% in 1966 to 85.7% in 1995. In China it grew from 19% in 1981 to 51.3% in 2011. Both economies grew from low income to upper middle income during this period. In comparison urbanization in India grew from 17.3% in 1951 to 31.2% in 2011. It means only 2.3% increase per decade. It is because of the slow migration of workers from rural to urban. There are many reasons for slow migration. An extremely important point  among them is the is the absence of affordable rental housing in urban India. When workers migrate to cities to take advantage of better paid jobs, they need to find a place to stay at low rent. But this kind of facility is not available in most of the Indian cities. With one exception Rajasthan, rental laws in India are tilted against the landlords. This is the reason owners instead of renting prefer to keep their properties empty. In most well run cities, commercial rental housing fulfills the housing needs of migrants. But such things are rare in Indian cities. If India is to achieve faster urbanization, an essential element in economic transformation,  it will need to make its cities rental housing friendly to potential migrants. In order to achieve this and change the mindset of the house owners both the state and Central government should work together to amend laws.    

 

Soumya Bhattacharyya

PGDM Batch 2019-21