India’s Small Towns and the Shifting Urbanisation Landscape

Source: The post  “India’s Small Towns and the Shifting Urbanisation Landscape’’ has been created, based on “Are India’s small towns being increasingly urbanised? | Explained” published in “The Hindu” on 16th January 2026.

UPSC Syllabus: GS Paper-2- G

Context: India’s urbanisation is no longer driven only by metropolitan cities. A significant but less visible transformation is occurring through the rapid proliferation and urbanisation of small towns (population below 1 lakh), which now constitute the bulk of India’s nearly 9,000 towns.

Reasons for the proliferation and urbanisation of small towns

1. Crisis of metropolitan accumulation: Indian metros face over-accumulation marked by inflated land prices, stressed infrastructure, and high living costs.
2. Capital relocation: Capital is shifting to small towns due to cheaper land, lower wages, weaker regulation, and minimal political scrutiny.
3. Economic functions of small towns: They are emerging as logistics hubs, agro-processing centres, warehouse towns, construction economies, service and consumption markets.
4. Labour absorption: Small towns absorb migrants pushed out of metros and rural youth facing agrarian distress.
5. Structural outcome of capitalism: Small towns are fully embedded in the urban process, not peripheral to it.

Are small towns a better alternative to metros?

1. No inherent inclusivity: Growth is characterised by the urbanisation of rural poverty rather than equitable development.
2. Dominance of informality: Informal labour, home-based women workers, and insecure platform-based employment prevail.
3. New power hierarchies: Local elites such as real estate brokers, contractors, micro-financiers, and political intermediaries control land and labour.
4. Ecological stress: Unregulated groundwater extraction, tanker economies, and weak environmental oversight are common.

Policy and governance failures

1. Metro-centric urban missions: Schemes like AMRUT largely exclude small towns from substantial infrastructure investment.
2. Weak municipal capacity: Small-town local bodies are underfunded, understaffed, and lack planning autonomy.
3. Inappropriate planning models: Metropolitan templates are replicated without accounting for local socio-economic realities.
4. Token participation: Citizen engagement is limited to procedural formalities.

Way Forward

1. Political recognition of small towns as the main frontier of India’s urban future.
2. Context-specific planning integrating housing, livelihoods, transport, and ecology.
3. Empowered municipalities with transparent finances and administrative capacity.
4. Democratic institutional space for workers’ collectives, cooperatives, and environmental groups.
5. Regulation of capital and platforms to ensure labour rights, local value retention, and data accountability.

Conclusion: India’s small towns are central to its urban trajectory. Without policy correction and political will, they risk becoming sites of deepened inequality. With democratic planning and regulation, they can evolve into engines of balanced and sustainable urbanisation.

Question for Practice: “Small towns, rather than metropolitan cities, are emerging as the primary sites of India’s urban transformation.” Critically examine the causes, nature, and implications of this shift.

Source: The Hindu