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“Urban” or “Rural” - What’s in a Name?

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26 Feb 2019
Researchers from the IDFC Institute, look into the sustainability of the current definition of “urban” in India.

We have been told often that India “lives” in its villages. However, recent reports and studies on urban growth dispute this. Globally, more people live in urban areas than in rural areas, with 55% of the world’s population residing in urban areas in 2018. The United Nations estimates that India alone is projected to add 416 million “urban” dwellers by 2050. But again, what is “urban” and “rural” is still a bone of contention!

In a recent study, researchers from the IDFC Institute, have looked into the current definition of “urban” in India. The study assessed the  National Rural Employment Guarantee Scheme (NREGS) of the government and its implementation based on the definition of ‘urban’ and ‘rural’ in India. The study was published in the Journal of Asian Economics.

The Indian government has two modes for classifying urban and rural areas. The first is the administrative definition based on whether a settlement has an urban or rural local body. The second definition is based on the census of India, which states that settlements having more than 5,000 people, population densities greater than 400 persons per square kilometre, of which 75% of male workers are involved in non-agricultural pursuits are urban together with settlements governed by urban local bodies. But, the question is, does this truly capture the extent of urban growth in India?

“It's a widely held belief that India is largely rural. Most central and state government schemes and grants are along rural-urban lines. Incorrect definitions would result in considerable misallocation of government funds and mistargeting of beneficiaries”, says Dr. Vaidehi Tandel from IDFC Institute, who is a co-author of the study. “Incorrect definitions also result in haphazard and unregulated development due to an absence of proper town planning and building standards”, she adds, talking about the motivation behind the study.

Some of the largest centrally sponsored schemes in India, like the National Rural Health Mission and the Pradhan Mantri Gram Sadak Yojana, use the administrative definition to identify and target ‘rural’ areas. A faulty definition would impact targeting, with access either denied to those who need these schemes or given to those who do not need them, says the study.

The examination of the relationship between the NREGS programme (with certain control variables like economic development and political factors) and urban growth for the administrative division is carried out at the district level.

The results showed that the relationship between NREGS with controlled variables and the urban growth is positive, for the administrative division. This implies that more urbanised districts show greater programme use.

But, using the administrative definition in identifying the urban and rural areas for the fund allocation may not have the desired outcomes and may not be useful for the citizens. Hence, as mentioned in the study, “In the meantime, it may be preferable for policymakers to rely on criteria that can be measured objectively and to reduce the reliance on urban-rural categorisation.”

The study argues that the true extent of urbanization in India is not captured by the administrative definition. “It may not be possible to have the perfect definition of urban but using objective demographic and spatial indicators would be an improvement over the existing situation where states use their discretion in granting the status of statutory towns to settlements”, suggests Dr Tandel.

“Urban areas have different characteristics and public goods requirements. For instance, urban areas have higher densities that give rise to externalities. Congestion and potential for spread of disease and epidemics are higher in urban areas. Services like fire fighting, town planning, solid waste management, and public health systems are therefore more critical in urban areas. At the same time, high densities enable economies of scale and cheaper provision of certain services”, signs off Dr Tandel.