1. P.G. STUDIES SEM- 1
Graduate Report
PLANNING THEORY (C-631)
IMPACTS OF URBANISATION
ON ECONOMY
Guided By : Prepared by :
Dr. J.E.M.MACWAN CHEITALI SHROFF
P11 UP023
POST GRADUATE SECTION IN URBAN PLANNING
C.E.D,SVNIT
2011 (July-December)

2. certificate
This is to certify that Graduate Report
entitled “IMPACTS OF URBANISATION ON ECONOMY” is submitted by SHROFF
CHEITALI C. (P11UP023), student of 1st semester, M.Tech (Urban Planning) for the
subject Planning Theory (CE – 631) for the term ending in November 2011.
Signature of PG In-charge Signature of guide
(Dr. J. E. M. Macwan) (Dr. J. E. M. Macwan)
Civil Engineering Department, M.Tech. (Urban Planning), Semester-1

3. Acknowledgement
I earnestly wish to express my heartfelt thanks and
a sense of Gratitude to Dr. J. E. M. Macwan, for his
Valuable
Guidance and constant inspiration in preparing this report,
without which i would not have been able to complete this
report.
Civil Engineering Department, M.Tech. (Urban Planning), Semester-1

4. CONTENTS
1 Introduction
2 Purpose Of the report
3 Terminology
4 Urbanisation & Economy in general
5 Impacts of urbanisation
Positive & negative
6 Conclusion
7 References

5. Introduction
• Urbanization is a defining phenomenon of the 21st century.
• It is the phenomenon that changes the structure of the society, globally.
• The developing world is at the center of demographic & economic
transformation.
• About 400,000 sq. kilometers will be constructed for urban uses between
2000-2030 ,doubling the world’s buiit up urban area.
• Nearly two billion new urban residents are expected in the next 20 years.
Doubling the urban populations of South Asia and Africa.
• UN World Urbanization Prospects report for global urban population.2005
• Rapid Urbanization Growth
220 Million Year 1900 13%
732 Million Year 1950 29 %
3.2 Billion Year 2005 49 %
4.9 Billion Year 2030 60 %

6. Purpose
The purpose of the report is
• To study the various factors creating rapid urbanisation globally.
• To indicate various positive and negative Impacts of Urbanization on
economy.
• To study how to minimize these negative Impacts of Urbanization
• To study how to improve rural economy & growth

7. Urbanisation
• People from villages move into cities to seek economic opportunities.
This migration from rural areas to big cities is called urbanization.
• Living in cities permits individuals and families to take advantage of the
opportunities & luxuries.
• Cities are flourished with industries , educational institution
,recreational areas ,better food supplies ,healthcare with basic
infrastructural facilities such as transportation , water
supply, electrical, sanitary, etc. whereas there are limited opportunities &
basic amenities avail within rural areas; contributing migration to cities.
• After rural migrants coming to urban area they spend their lives in
insecure, poorly paid jobs in spite, they participate in economic
growth, and adjust to economic change, through urban labor markets.
• They grow as urban poor slums & their life is worse then a village in most
cases. They are not able to earn basic amenities of life, due to rich
economy of cities.

8. Industrial
pollution
Traffic jams on roads
High-rises & slums

9. Urbanization facts of INDIA – Report by World Bank
• 3 out of world's 21 mega cities: -Mumbai (19 mill); Delhi (15 mill) Kolkata(14mill)
• Large Cities: -23 in 1991; 40 in 2001
• Urban Pop.: - 28% of 1,030 mill in 2002.
• Estimated Urban Pop. by 2017: 500 million
• % of Urban Residents who are Poor: About 25%
• Slum Population: About 41 million in 2001
• Estimated Slum Pop. by 2017: 69 million
• In the next 20-25 years, India’s urbanization level is expected to rise from the
present 30% to 40- 50%, with over 60 cities of 1 million plus population
contributing about 70% of India’s GDP.
• India’s growing cities and towns face major challenges in creating adequate
infrastructure including transportation, water, solid waste, and power sectors.

10. Urbanisation & economy in general
• Urbanization itself has punctuated economic development.
• What happens to surrounding rural areas when a city grows?
Agents effecting urbanization on rural economy
• Backward linkages& Rural non-farm employment
urban transport rural
Higher income ,more consumption production of goods, labor income
Market, technology
• People may commute to cities for small jobs & trades. These process boost
ups the transportation & marketing.
• Remittances- The urban migrated worker sends share of his income to his
family in rural area.
• Agricultural production: due to migration less agricultural production.
• Rural land prices: higher demand of agricultural land for residential/different
commercial purposes for expansion. This may generate increased income for
land/farm owners.
• Agricultural products: Due to unavailability of proper transport and
technology such as cold storages in rural areas, they may have to sell the
goods at lowest profits in nearby towns.

11. Economic Aspects
• Urbanization is an integral part of the process of economic growth.
• With less than 1/3 of India’s people, its urban areas generate over 2/3 of the
country’s GDP and account for 90% of government revenues.
• Economic development refers to progress toward a community’s economic
goals such as increased employment, income, productivity, property values, and
tax revenues.
• Economic development of any country hinges on the efficient employment of
factors of production such as labor, land, capital and organization.
• There is commercialization of production with monetization of economy.
• The people must have the required ability, experience and knowledge to make
the best use of the resources & facilities that are made available.
• The technology plays very important role when appropriate social conditions
are present.
• Transportation planning decision also affect economic development by
influencing the connections between resources, workers, businesses and
customers; by influencing consumer expenditures; and by affecting land use
development location and intensity.

12. World Systems Analysis
• There is a Global Economy which all countries are a part of.
• The global economy benefits the rich at the expense of the poor
• The Global Economy is divided into the Core, Semi Periphery and Periphery.
• World Systems Analysis theorists such as Immanuel Wallerstein argue that the
development of the Core is a result of its exploitation of the Periphery.
• Core – Initially based on comparative
advantages (resource and location), develops
from acquired advantages (agglomeration,
increased tax revenue, increased public spending, education and health care,
skilled labour, improvements in infrastructure).
• Periphery – Inaccessible, under populated,
poor resources.
• Downward transitional area could be seen as the periphery suffering from
backwash effects of development in the Core.

13. John Friedmann’s Stages of Growth
Gives a more detailed explanation of
periphery and highlights that spatial
inequalities change over time.
Stage 1 – No urban hierarchy
Stage 2 – Primate city
Stage 3 – Regional sub-centres
Stage 4 – Regional inequalities are
reduced in a fully integrated urban
system

14. Impacts of urbanisation on economy
Urbanisation brings with it several consequences- both adverse and beneficial.
They impact on social ,commercial and environmental areas.
• Positive Impacts
• Industrialization
• Employment Opportunities
• Application of Technology
• Standard of life
• Infrastructure development
• Educational Development
• National growth
• Negative Impacts
• Housing sector
• Land market
• Cost of living
• Cost of transportation
• Cost of urban infrastructure

15. Positive Impacts of urbanization on economy:
INDUSTRIALISATION
• Industries plays important role in employment of the people and economic
activity.
• The more industrialization matured, the more opportunities were created for
work and investment, and this brought more people to cities as consumers
and as workers & generates the economy.
EMPLOYMENT OPPERTUNITIES:
• Due to industrialization there are more job opportunities in urban areas as
different industries & corporate sectors expands & they need labors to run
the machines.
APPLICATION OF TECHNOLOGY
• Due to higher market growth & competitions there are new research &
advancement in technology, at global level.
• In India, software development and related information-communication
services is the leading sector for economic growth.
• This sector has grown more rapidly and become internationally more
competitive than any of the country’s traditional industrial sectors.

16. STANDARD OF LIFE:
• The family structure changes with urbanisation.
• In urban areas nuclear family, consisting of only of parents and their growing
children, predominates.
• Due to small families they tend to fulfill all luxuries of life, hence standard of
living increases, hence there is more consumption.
INFRASTRUCTURE DEVELOPMENT:
• As city grows with industries all the necessary infrastructures such as
roads, railways, water supply system ,electrification, drainage system, land
development immediately take place for communication & to attract more
people to stay there.
EDUCATIONAL DEVELOPMENT:
Education is a tool to eradicate social evils. As population grows in urban areas &
due to high standard of living they demand for good qualitative, competitive
education, it is at very speedy growth at no cost.
NATIONAL GROWTH:
As the urban area grows, in all sectors, fields, the growth of city results in state as
well as national economical growth at global level .

17. Negative Impacts of urbanization on economy:
There are some negative impacts of urbanisation due to excessive
concentration on urban areas.
• HOUSING SECTOR:
• Due to population growth & industrialization the housing cost has
tremendously boost up. Houses have become expansive.
• For rural migrants, due to their poor economic condition they are not able
to buy the good houses & they create slums in open urban or near
industrial areas.
• LAND MARKET:
• land is a major resource
• Agricultural land converted in to nonagricultural land
• Land prices rises tremendously & unexpectedly due to more demands.
• UNEMPLOYMENT:
• Unskilled rural migrant many times lacks jobs.
• fails to meet financial obligations ,family daily needs,rent etc.
• Rising unemployment increases the crime rate in cities.

18. COST OF LIVING:
• Due to more demands, cost of living increases, becomes expensive.
• It becomes difficult for rural migrant people to meet both ends of life for
basic necessities & amenities, & they are deprived from basic necessities of
food ,clothing & home. Thus rural poverty translates into urban poverty.
TRANSPORTATION:
• Transportation is a key issue in cities as transportation is the movement of
people and goods from one place to another.
• Masses of Poor people have to depend on public transport to commute to
their work & on other hand classes of rich people uses luxurious four
wheelers for their smaller trip.
• Due to inadequate investments ,public transport is lacking in growing
cities. Hence commuters have to spend more time in travelling & it reduces
the efficiency of production.
Environment:
• Due to urbanisation, industrialization results, which give rise to air, noise,
water, land pollution effecting the health & living condition of poor labors
,which will reduce the production capacity of goods/products thus
effecting economy.

19. Conclusions
• As a city grows, due to over population& limited infrastructure, it fails to meet
the growing demands which are uncertain ,hence it starts decaying.
• Indian is the mixed economy where the emphasis is on macro-economic
planning.hence Governments often do not meet these basic necessary
services/ needs of residents and hence urban development is dominated by
private capital.
In order to save the dying cities the different policies should be thought of
• Encourage private/commercial sector invest-ment.
• Policies should be made for High quality public transport which can provide
many economic benefits and can be cost effective, with supportive land use
policies.
• Government should develop policies for affordable housing projects for
different income groups & to make cities rid of unhealthy slums.
• Policies should be developed for growth of High-tech industries &
specialisation techniques which can earn valuable foreign exchange .
• Investment policies for poor urban slums with affordable insurance & transit
house facilities for slums to make them sustainable in urban fabric.
• Lastly we should prepare policies to support these structural shift &
inequalities occurring in the process of urbanisation, instead of arguing about
the cities growth & limit, for its better functioning & development.

20. References
 Astha Agarwalla,(jan-2011), ” Agglomeration Economies and Productivity Growth in India” –IIMA
,DELHI, W.P. No. 2011-01-08
 Briefing paper 44 ,jornal odi,London (November -2008), “Opportunities & exploitation in urban
labor markets”. Overseas development institute ,London.
 Charles m. becker & Andrew r. Morrison(10th February 2005),
“Urbanisation in Transforming economies”
 Dr. kiran wadhwa , chief economist (retd), hudco,new delhi (july 2009) “Affordable housing for
urban poor”. Ministry of Housing & Urban Poverty Alleviation ,Government of India.
 Jean d'Aragon, (13thjune 2007) “Housing & sustainable urbanisation in developing countries.”
International Development Research Centre, Ottawa, CANADA.
 P.Duraisamy (2004) “Health, Poverty and Economic Growth in India” Department of
econometrics ,university of madras.
 Todd Litman (18 August 2010), “Evaluating Transportation Economic Development Impacts
Understanding How Transport Policy and Planning Decisions Affect
Employment, Incomes, Productivity, Competitiveness, Property Values and Tax Revenues
, Victoria Transport Policy Institute.