Urban India to contribute 70% to GDP by '11

NEW DELHI: With major cities yielding various job opportunities, the contribution of urban India to the national GDP is likely to touch 70% in the next five years, industry body Assocham has said.

An Assocham paper titled ‘Urban India: Growth, Opportunities and Difficulties’, revealed that almost 300 million Indians living in major metros and cities would push India’s GDP growth to 10% by ’11, from the ’01 level of 6%.

Urban India would emerge as a major epicentre for both domestic economic activities and overseas businesses that would pave the way for higher urban per capita income at Rs 36,000 per annum by ’11, which is a Rs 10,000 jump from the current estimates of Rs 26,000 per annum.

“Job opportunities for a large number of job seekers and qualified professionals in areas of IT and IT-enabled services, manufacturing, biotechnology will be offered in metros and smaller cities like Pune, Hyderabad, Kochi, Ahmedabad, Chandigarh, Dehradun and Jaipur,” Assocham president Anil K Agarwal said.

The urban population grew to 27% in ’01 from 25% in ’91 due to migration of labourers from villages to cities for financial security and better standards of life. Towns in India grew by 16% to 4,368 in ’01 from 3,768 towns in ’91 and is expected to touch the 5,000-mark by ’11. As a result, the urban employment rates would exceed the present 38%, much higher than the rural employment growth rate of mere 16%, Assocham said.

The Centre, through the Jawaharlal Nehru Urban Mission, has already earmarked an outlay of Rs 1 lakh crore for the next seven years to cover around 60 cities with a million-plus population for improving infrastructure, sanitation and housing facilities.

The annual investment for urban water supply, sanitation and roads are estimated to be about Rs 28,035 crore for the next decade, but improving urban transport infrastructure with a population exceeding 1 lakh, would need a whopping Rs 2,07,000 crore in next 15-20 years, the chamber said.

Assocham recommended urban reforms and private sector investment — which cannot be invited unless a proper legal and regulatory framework is put in place — to support this growth. It also called for innovative tax structures to protect the poor from paying more for municipal amenities.