India’s road to urbanisation
Cities are the nuclei of economic growth in every country. In India, where urbanisation is low which ranks below 60% of global average cities, its cities account for only 3% of the country's land but contribute 60% of its gross domestic product (GDP). The size of cities is also directly proportional to people's personal income, and NITI Aayog, a government think tank, and the Asian Development Bank jointly published a study on urban development (“Indian Urban Studies”) last year, saying that for every percentage point increase in a region's urban population, the area’s GDP would increase by 2.7%.
The United Nations projects India's population to reach 1.428 billion this year, surpassing that of mainland China. Meanwhile, nearly half of the country's population is under the age of 25, while only 7% are aged 65 or over. U.S.-based Indian economist Shruti Rajagopalan points out that this huge labour market is not only young, but also well-educated, so it has great potential. She said, "this generation of young Indians will be the largest consumers and labour source in the knowledge and network goods economy."
As I pointed out in my earlier article "The rise of Indian-origin CEOs", the country focuses on STEM education, so it should not be underestimated in the digital wave transformation.
In 2021, India's GDP was US$3.18 trillion, less than one-fifth of China's (US$17 trillion). However, India strives to increase GDP by more than $50% to US$5 trillion by 2026 and US$40 trillion by 2047, accelerating urbanisation being the key.
As early as 2015, India proposed to engage in a Smart City Mission to build 100 smart cities across the country, which was originally scheduled to be completed last year but postponed to June next year. The ambitious plan aims to improve infrastructure in all aspects, from water supply, electricity, health and education to waste disposal, transportation, housing and digital government services, involving more than 7,000 projects with an overall budget of about Rs 205,018 crore (about HK$190 billion). Many countries are also actively participating which include Singapore, the United States, Japan, Germany, Israel and Hong Kong being said to be one of the investors as well.
As of 30 April 2023, the cities had completed 5,700 projects or 72% of the total number of projects, but around 90% of the released funds have been utilised.
With a plan of this magnitude and scale involved, it is not uncommon to overspend and overrun. According to the analysis of the "Indian Urban Studies", the first of the 17 “key problem areas” towards urbanisation in the country is the "lack of common economic vision and planning" of different sectors, which is not an isolated phenomenon, but is seen in all Indian cities. Four years ago, I pointed out in my article "10 Tips for Developing Smart Cities" that in order to successfully develop smart cities, the public, public and private sectors, and opinion leaders need to agree on objectives to be achieved in order to mobilise the participation of all parties, otherwise it is likely to be half successful.
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