impacts of urbanization on economy print

8/2/2019 Impacts of Urbanization on Economy Print

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Impacts of Urbanisation on Economy - 2011

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CONTENTS:

1. INTRODUCTION

2. PURPOSE OF THE REPORT

3. TERMINOLOGY

4. URBANIZATION & ECONOMY IN GENERAL

5. IMPACTS OF URBANIZATION5.1 POSITIVE IMPACTS

5.2 NEGATIVE IMPACTS

6. CONCLUSION

7. PLANNERS ROLE

REFERENCES


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2. PURPOSE OF THE REPORT:

The purpose of the report is

y

To study the various factors creating rapid urbanisation globally.y To indicate various positive and negative Impacts of

Urbanization on economy.

y To study how to minimize these Impacts and also Urbanization

process.


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y To study how to improve rural economy& growth.

3.URBANISATION:

Many villagers and small town dwellers want a living in big cities. With some

expectations, they make a movement from villages to big cities. This

migration from rural areas to big cities is called urbanization.

Living in cities permits individuals and families to take advantage of the

opportunities of proximity, diversity, and marketplace competition.

People move into cities to seek economic opportunities.

Most industries and educational institution are located in cities whereasthere are limited opportunities within rural areas; this further

contributes to migration to cities.

In urban area better service available of sufficient electricity, potable

water, medical care, better sanitation and improved food supplies,

which reduce death rates and cause population to grow.

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 labour markets.

They grow as urban poor slums & their life is worse than a village in most

cases.


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Traffic jams on roads

Industrial pollution

High-rises & slums


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4. URBANIZATION & ECONOMY IN GENERAL:

Urbanization itself has punctuated economic development.

y What happens to surrounding rural areas when a city grows?y Does the areas population receive economic benefit from it and

up to what extent

Six agents effecting urbanization on rural economy

1 Backward linkagesTransport

Higher income ,more consumption production of goods, income

Market, advanced technology

2 Rural non-farm employmentThe increase demands of urban finished goods tends to provide

non-agricultural production in sub-urban areas i.e. rural areas nearer

to urban areas,hence they do not have to depend only on agricultural

economy.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, where they do not have to depend now only on

farming income.

Agricultural production: due to migration, reduction in rural

labour resulting in less agricultural production.

RuralUrban


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Rural land prices: The growth of cities may increase agricultural

land prices in nearby rural areas due to the higher demand for

agricultural land for residential 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.

Economic Aspects: Economic development refers to progress toward

a communitys economic goals such as increased employment, income,

productivity, property values, and tax revenues.

y Economic development of any country hinges on the efficient

employment of factors of production such as labour, land, capital

and organization. There is commercialization of production with

monetization of economy.

y The people must have the required ability, experience and

knowledge to make the best use of the resources & facilities thatare made available.

y The technology plays very important role when appropriate social

conditions are present.

y 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.


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John Friedmanns Stages of Growth

Diagram gives a more detailed explanation of periphery and highlights that spatialinequalities change over time.Stage 1 No urban hierarchy.Stage 2 Primate city.

Explains that along with core peripheral sub-urban centres should be developed

simultaneously.Stage 3 Regional sub-centres

Core & peripheral development goes hand in hand supporting each other.Stage 4 Regional inequalities are reduced in a fully integrated urban system

Loaded & exploitation of central core system is reduced & hence full growth with

developed regional sub-urban centre is achieved.


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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, Indias 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 Indias GDP.

Indias growing cities and towns face major challenges in

creating adequate infrastructure including transportation, water,

solid waste, and power sectors.


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5.IMPACTS OF URBANISATION ON ECONOMY

Urbanisation brings with it several consequences- both adverse

and beneficial. They impact on social and environmental areas.

5.1 Positive Impacts of urbanization on economy:

a) INDUSTRIALISATION: For economic development of the

country industrial play important role as the industries result 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.

b) EMPLOYMENT OPPERTUNITIES: Due to industrialization

there are more job opportunities in urban areas as different

industries & corporate sectors expands & they need labours to

run the machines.

c) NATIONAL GROWTH: As the urban area grows, in all

sectors, fields, the growth of city results in state as well as

national economic growth at global level .

d) APPLICATION OF TECHNOLOGY: Due to higher market

growth & competitions there are new research & advancement in

technology day by day, with growing competitions at global level.

In India, software development and related information-

communication services is the leading sector for economic growth. This

new growth sector, which has grown more rapidly and become

internationally more competitive than any of the countrys traditional

industrial sectors.


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e) STANDARD OF LIFE: The family structure changes with

urbanisation. In urban areas nuclear family, consisting of only of

parents and their growing children, predominates. Families and

children reaching adulthood are more mobile and tend to relocate towhere jobs exist. Due to small families they tend to fulfill all luxuries of

life, hence standard of living increases, hence there is more

consumption.

f) 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.

g) 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.

5.2 Negative Impacts of urbanization on economy:

There are some negative impacts of urbanisation due to

excessive concentration on urban areas.

a) HOUSING SECTOR: Due to growth of population in urban

areas, the first basic need is house, a shelter. Due to

industrialization land cost has effectively increased, due to which

the housing cost has tremendously boost up. Houses have

become expansive. For rural migrants, due to their pooreconomic condition they are not able to buy the good houses &

they create slums in open urban areas.


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b)LAND MARKET: Due to urbanisation the agricultural lands areconverted in to nonagricultural land for different uses such as

industries, housing sector, public recreation spaces, institutes,

etc. Land is the major resource required for growth of any

city. Hence the land prices rises tremendously & unexpectedlydue to more demands.

c)UNEMPLOYMENT: Unskilled rural migrant many times lacks jobs in urban industrialization, & fails to meet financial

obligations such as purchasing food to feed oneself and one's

family, pay bills, mortgage or to pay rent. Rising

unemployment increases the crime rate in cities.

d)COST OF LIVING: Due to high standardized life, cost of livingincreases, things or finished good prices increases due to more

demands in urban market, & 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 & they creates slums.

Thus rural poverty translates into urban poverty.

e) TRANSPORTATION: Transportation is a key issue in cities astransportation is the movement of people and goods from one place

to another. A mass 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

also. 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.f)Environment: Due to urbanisation, industrialization results,

which give rise to air, noise, water, land pollution effecting the

health & living condition of poor labours ,which will reduce theproduction capacity of goods/products.


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6. Conclusions:

As a city grows, the cost of housing and infrastructure also grows,

since there are less water, land and building material available, and

greater congestion problems. A city decays in this way, governments

often do not meet the service needs of residents and urban

development is dominated by private capital.

In order to save the dying cities the different policies should be

thought of such as

y Encourage private/commercial sector investment. Private sector

development requires governments to provide appropriate regulatory

frameworks, an attractive infrastructure investment, and a workforce

with at least a basic education.

y 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.

y Government should develop policies for affordable housing projects for

different income groups & to make cities rid of unhealthy slums.

y Policies should be developed for growth of High-tech industries &

specialisation techniques which can earn valuable foreign exchange

and lot of money for a country in the stock markets.

y Investment policies for poor urban slums with affordable insurance &

transit house facilities for slums should be thought of to make them

sustainable in urban fabric.

y How to support these structural shift & inequalities occurring in the

process of urbanisation, instead of arguing about the cities growth &

limit.


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7. Planners Role in Urban Economy:

First & most Important step is to achieve proper land use

planning satisfying the future growth & demands of next 20 to

30 Years with provision of next 50 Years.

The Urban area shall be planned with future expansion

possibilities with connecting linkages in all directions.

The growth of the city & the peripheral area (rural) should go

hand in hand to avoid concentration & exploitation at one center.

Transportation planning & road network shall be given prime

importance as it is key factor of production economy. Public

transport facilities shall be given importance.

Infra-structure shall be provided with future consideration of

growth & demands.

Housing Sector shall be designed with sufficient open lands

allowing future expansions.

Transit house facilities for slums & migrators shall be provided.

Lastly all resources are limited, hence shall be properly analyzed

& used efficiently for benefits of humans & environment.


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REFERENCES:

Astha Agar Walla,(jan-2011), Agglomeration Economies and

Productivity Growth in India IIMA ,DELHI, W.P. No. 2011-01-08

Briefing paper 44, journal 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.

Dr. S.P. Gupta (December 2002) , India vision 2020 planningcommission government of India, New Delhi.

Jean d'Aragon, (13thjune 2007) Housing & sustainableurbanisation in developing countries. International Development

Research Centre, Ottawa, CANADA.

Marervath, Tobias just,(may 8, 2006), Building up India- outlook for

Indias real estate markets published in India's real estate markets-Deutsche bank Research.

P.Duraisamy (2004) Health, Poverty and Economic Growth in

India Department of econometrics ,university of madras.

Todd Littman (18 August 2010), Evaluating Transportation

Economic Development Impacts Understanding How TransportPolicy and Planning Decisions Affect Employment, Incomes,

Productivity, Competitiveness, Property Values and Tax Revenues, Victoria Transport Policy Institute.

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