Urban Economy

8/3/2019 Urban Economy

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URBAN ECONOMY


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IMPORTANCE OF URBAN CENTRES

Cities are the engines of economic growth.

Provide specialized services and enhances thequality of life.

Urbanization leads social-economic changes,economic development and make the processsustainable, efficient and equitable.

Contribution to GDP(from urban sector)increased from 29% in 1950-51 to 60 % in2001.


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CONTRIBUTION TO NATIONAL INCOME

Declined from 6.4 %to 6 % from 1999-2000 to2000-01,attributed by declined in growth rate inservice sector.

Source :Central Statistical Organization (Economic Survey 2000-2001),GOI

National Income (Net National Product)

685.9

806.6

941.9

1094

1224.8

1434.4

1590.3

685.9734.3

787.8852.1 890.7

9491011.2

0

200

400

600

800

1000

1200

1400

1600

1800

1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00

R

s000'crore

Current Prices 1993-94


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ECONOMIC DEVELOPMENT ANDURBANISATION

Positive relationship between urbanization andeconomic development .

Lead by industrialization, commercialization

Increase in productivity, employment generationand improvement in infrastructure facilities.Employment rate has increased in private sector postreform period(5% increase).Negative in public sectors / less than 1%.


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Planning commission (Economic Survey 2000 01,GOI)

Growth Rates of Employment in Organised

Sectors

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

5.5

6

1991 1992 1993 1994 1995 1996 1997 1998 1999

Figin

%

Public Sector Private Sector Total Organised


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Employment by Industry

Public

Sector(%)

PrivateSector

(%)1990 1995 1999 1990 1999 1995

Agriculture ,Hunting etc. 5.49 5.39 5.15 8.76 8.94 8.71

Mining and Quarrying 9.66 10.16 9.26 0.99 1.03 0.87

Manufacturing 18.7 17.56 15.69 44.57 47.06 51.78

Electricity ,Gas & Water 8.97 9.35 9.62 0.04 0.04 0.41

Construction 11.34 11.64 11.07 68 0.53 0.71

Whole Sale & Retail Trade 1.5 1.62 1.63 2.19 3.08 3.23

Transport ,Storage &Communication 30.23 31.06 30.84 0.52 0.58 0.69

Finance ,Insurance ,Income,Real Estate,etc. 11.54 12.83 12.95 2.39 2.93 3.58

Communication ,Social &Personal Services 90.19 95.04 94.94 14.6 16.03 17.00

TOTAL 187.62194.6

6194.1

5 75.82 80.59 86.98

Source:Ministry of labour Economic Survey 2000-01,GOI.


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INFORMAL SECTOR EMPLOYMENT IN CITIES

49.5

28.5

46.5

61.4

53.8

65.5

0

10

20

30

40

50

60

70

Mum

bai

Kolka

ta

Ahmedab

abDe

lhi

Chennai

Banalore

Fig

in

Per

centage

Source:The State of the Worlds Cities 2001,UNCHS (Habitat)

Formal and Informal Sector Economy


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Formal and Informal Sector Economy

Formal sector economy pays high salaries butsustains smaller proportion of urban labourforce.

Informal sector has higher share of labour

force. Informal sectors mostly found in developing

countries. Informal sector is reliable even instagnant stage of economy.

Informal sector provides new employmentopportunities . Self help employment initiatives


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ECONOMIC DEVELOPMENT AND EMPLOYMENT

Share of Informal Sector to Total WorkforceCity Men (%) Women (%) Total (%)

1993 1998 1993 1998 1993 1998

Bangalore 22.5 25 80 75 32.2 34.2

Chennai - - - - 60.6 64.8

Guwahati 50 55 60 65 53 58Indore 60.4 69.1 74 86.9 63.7 72.7

Jaipur - - - - - -

Ludhiana 56.6 58.3 62.5 55. 9 59 58

Mumbai 68.3 70.8 61.2 67.1 67.5 70.3Mysore - - - - 31.1 34

Vijaywada 60 64.6 82 75.8 65.2 66

Patna - - - - - -


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The above data indicates informal sector in the city

workforce has increased ,except Ludhiana whichshows marginal decline.

Female employment ranges from 60% to 82%in 1993& 56 % to 87% in 1998

Employment opportuinities for males is also increasedin all towns from 25% to 65%.

Need to accelerate public support schemes to

promote informal sector activities to enhanceproductivity.

Provision for access to credit ,raw materials, markets,insurances and safetynets.


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Policy Initiatives


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Main Focus on decentralised,participatory anddemand driven approach.

Based upon 3-tier system started with 20

families Neighbourhood Groups (NHG),followed by 200 families NeighbourhoodCommittee (NHC) and culminating with 2000families to Community developmentSociety(CDS).

Mainly represented by poor women.

Encouraging local economic development bysupporting establishment of saving and credit

groups (Sewa Bank).

Policy Framework & Programme Initiatives

Self Help Groups


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Promoting Home Based Economic Activities:

Sustainable and Cost effective for small andmicro enterprises in urban and rural areas.

Development of Small and Micro Enterprises: Direct intervention to create employment

opportunities.(SJSRY ,SGSY,NRY,UBSP)

Focus on promoting on self employment through

micro enterprises development. Women get priority of access.

Cash subsidy is minor component and creditfacility is offered through nationalized bank.

Policy Framework & Programme Initiatives


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The need for involving people in developmentprocess is required for proper development.

Solid Waste management in urban area is goodexample in this field which includes contracted

NGOs and Community Based Organization(Rajkot,Bangalore).

Training and IEC (Information ,Education andCommunication) for human resource developmentfor educating and mobilizing the beneficiary groups.

Skilled based training for repairs and maintenance,groups of plumbing and sanitation, consumer

durables ,credit groups.

Public Private Partnerships To StimulateEmployment Opportunities


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PER CAPITA CITY IN CITIES

0

5000

10000

15000

20000

25000

30000

35000

40000

Bangolo

re

chennai

guwah

ati

Indare

JAIPUR

Ludhia

na

Mumbai

Mysore

Patn

a

Vijay

wad

a

GNP

Fig

in

No.

1993 1998

Source: India :Report on urban Indicators:GOI 2001

Ministry of Urban Development and Poverty Alleviation


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Productivity and Partnerships

Aiming at reduction of urban poverty Convergence of resources from stakeholder in

urban development .

Per capita product among all town has shown

increased during 1993-1998. Per capita City Product of all cities is higher than

GNP(All India).

Chennai is highest followed by Mumbai and

Bangalore. Gross National Product is almost double from

Rs 7902 to Rs15019 within 5 year.


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Percentage of unemployment has reduced. Decline in female employment, needs

priority.

Under DWACUA (Development of Womenand Children in Urban Areas) womensgroup have been organized for thrift andcredit to generate income and employmentopportunities .

Productivity and Partnerships


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Mains tools in accelerating the process ofurbanization and industrialization.

Preferred location based on requirementof markets mainly focus on peripheralareas of cities

These corridors also attract othereconomic activities.

Development of industrial corridors,industrial estates,SEZS.

Emergence of Transport Corridors


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Urban poverty has declined to 21% (NSSO 99-

2000) .

Poverty

Poverty in India

0

10

20

30

40

50

60

1973-74 197-78 1983 1987-89 1993-94 1999-2000

Figin%

India Rural Urban

Source: Planning Commission ,Economic Survey,2000-01,GOI


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Employment Generation-Construction Sector

Ranks 4th among 14 sectors in terms ofbackward linkages.

3rd - Total linkage with other sectors ofeconomy.

High income multiplier 1:5.

Huge employment generation potential(5

th

employment multiplier).


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Private Sector Participation

Haryana joint development model .

West Bengal Housing Board-AmbujasModel.

Shelter delivery :relatively small .


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THANK YOU

Urban Economy

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