Chaotic Urban Growth Hinders Economic Development In India

Amy Kazim explore how chaotic urban growth and a political preference for rural government is beginning to hinder the development of India's largest cities.
November 22, 2011, 9am PST | George Haugh
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In the last two decades, rural migrants lured by factory jobs have poured into urban centers, but they cities they now call home are fast turning into dystopias undone by population pressure and neglected infrastructure. These conditions are already a serious drag on economic growth and could threaten India's prospects in competition with neighbor and rival, China.

"According to the 2011 census, the number of Indians living in urban areas has surged to 400m – about 31 per cent of the population. That is up from just about 285m, or 28 per cent, in 2001. That urban population is expected to surge to well over 600m in the next two decades, as increasingly mobile youth pour out of the countryside."

"These cities are going to start collapsing under their own weight," Jahangir Aziz of JPMorgan, says of India's 10 biggest conurbations. "Local governments are in a state of denial – they don't accept that these cities are in such a state that within a short period of time it will become almost impossible for them to do any business. Business is there now only because there is a very huge cost of moving out."

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Published on Monday, November 7, 2011 in The Financial Times
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