Are India’s small towns being increasingly urbanised?

UPSC Syllabus Topic: GS Paper 1 –urbanisation, their problems and their remedies.

Introduction

India’s urban future is often seen through megacities, but a deeper change is happening in small towns. Out of nearly 9,000 towns, most have populations below one lakh. Their rapid growth is not accidental. It reflects changes in capitalism, migration, labour markets, and policy choices. These towns are becoming key sites of economic activity, labour absorption, and consumption, even as they face serious governance, infrastructure, and inequality challenges.

Factors responsible for the growth of small towns in India

1. Crisis of metro-led growth: Large cities earlier absorbed labour, capital, and consumption, but now face over-accumulation. High land prices, broken infrastructure, and rising living costs are pushing people and firms out.
2. Search for cheaper spaces: Small towns offer cheaper land, flexible labour, and weaker regulation. These conditions attract logistics, warehousing, agro-processing, construction, and service activities.
3. Changing migration patterns: Migrant workers pushed out of metros and rural youth with limited farm options are moving into small towns. This makes small towns active parts of the urban process.
4. Economic restructuring: Older industries are declining or moving away from big cities. New activities shift to smaller centres, changing the size and spread of urban settlements.

Structure of urbanisation in small towns

1. Functional economic roles: Small towns act as logistics nodes, service centres, consumption markets, and agro-linked hubs. They support regional economies rather than operating as isolated spaces.
2. Urbanisation under stress: Urban growth happens under capitalist pressure, not planned inclusion. Development relies on low costs rather than strong public investment or regulation.
3. Polycentric urban spread: Large cities are no longer single-centred. Multiple centres emerge around them, while smaller towns grow alongside, connected through transport and markets.
4. Market-driven spatial patterns: Investment decisions are guided mainly by market forces. Planning no longer directs where economic activities should locate.

Concerns related to urbanised small towns

1. Urbanisation of rural poverty: Growth does not mean better living conditions. Informal labour dominates, with insecure jobs in construction, home-based work, and platform services.
2. New local power hierarchies: Control over land and labour shifts to real estate brokers, contractors, financiers, and political intermediaries. Inequality deepens within towns.
3. Infrastructure exclusion: Urban missions remain metro-centric. Most small towns are excluded from reliable water, sewerage, and transport systems.
4. Ecological stress: Dependence on tanker water, unchecked groundwater use, and weak waste systems increase environmental damage.
5. Weak local governance: Municipalities lack funds, staff, and authority. Planning is outsourced and local participation remains limited to formal procedures.

Policy gaps and planning limitations

1. Limits of city size control: Attempts to manage optimal city sizes remained theoretical. Policymakers could not develop tools to control urban distribution effectively.
2. Supply-side planning failures: Restricting land supply through height limits or low FSI raises prices. It harms affordability and pushes economic activity elsewhere.
3. Incomplete decentralisation efforts: Earlier recommendations for balanced growth and support to small towns were only partly implemented. Liberalisation weakened state-led spatial control.
4. Uneven infrastructure services: The real divide lies in unequal access to services between large cities and smaller towns, not just city size.

Way forward

1. Political recognition: Small towns must be accepted as the main frontier of India’s urban future, not as secondary or transitional spaces.
2. Context-based planning: Town plans should integrate housing, livelihoods, transport, and ecology. Metropolitan templates should not be copied blindly.
3. Empowered municipalities: Local governments need funds, staff, and decision-making power. Transparency and local accountability must improve.
4. Inclusive institutional spaces: Workers’ collectives, cooperatives, and environmental groups need a role in urban decision-making.
5. Regulation of capital and platforms: Digital and platform economies must ensure labour rights, local value retention, and accountability.

Conclusion

Small towns are now central to India’s urban story. They absorb labour, capital, and economic change, but also reproduce inequality and stress. Their future depends on political will, better planning, stronger local governance, and fair regulation. They can deepen exclusion or become spaces of democratic and balanced urban transformation.

Question for practice:

Examine how the growth of small towns reflects changes in India’s urbanisation pattern and discuss the key challenges and policy responses associated with this shift.

Source: The Hindu