Why smaller cities in India witnessing faster growth?.

• Malappuram secured first rank in the world rankings with a 44.1% change between 2015 and 2020

• The other cities in the top 10 list were three cities from China, one each from Nigeria, Oman, UAE and Vietnam

Leaving behind the fast changing metropolitan cities behind, three smaller cities in South India have secured a place in the list of world’s fastest-growing urban areas in The Economist Intelligence Unit (EIU) survey released on Friday.

According to the survey report, Malappuram, Kozhikode and Kollam are the only Indian cities enlisted in the top 10 of the world’s fastest-growing cities.


Malappuram secured first rank in the world rankings with a 44.1% change between 2015 and 2020, with Kozhikode ranking fourth with 34.5% change and Kollam standing at 10 with 31.1%, in the EIU survey.

This is when there is a preconceived notion that the maximum growth in India has been taking place in the national capital New Delhi along with other metros such as Mumbai, Kolkata, Bengaluru and etc. Economists reacting to the announcement hold that India is changing from all fronts and there is an enhanced investments being witnessed in all cities across India not only metros.

“It is remarkable that three Indian cities are among the world’s fastest growing urban areas and that all three are in Kerala, as seen in the EIU ranking. Smaller cities playing catch-up with their larger counterparts across the country will be a major driver of growth in the coming years," said Bidisha Ganguly - Principal Economist - Confederation of Indian Industry (CII).

“Clearly, this is where the opportunity lies, and greater penetration will occur across products and services. Both government and the corporate sector must focus on delivering services to these areas," Ganguly said.

Other cities from India making to the list are Thrissur in Kerala at 13th rank, Surat in Gujarat at 26, and Tirupur in Tamil Nadu is at 30 the position.

“Good to see that the fastest growing in India are not the monster metropolises, Mumbai, Delhi, Kolkata etc. When smaller towns; cities grow it signals that a wider distribution of wealth & job opportunities is underway. We need more smaller towns to Rise!," Industrialist Anand Mahindra tweeted.

India is also witnessing rapid urbanisation. With government schemes in health, education and more investments in small and medium scale enterprises has also shown progress. The government think tank, NITI Aayog has been focussing on improving services in the tier 2 cities.

"Top heavy urbanisation is fundamental problem of Indian urban landscape. Not only population but other basic facilities, including health are concentrated in metros and class one towns. Development of infrastructure is the only solution," said Pritam Datta Fellow at The National Institute of Public Finance and Policy (NIPFP), an autonomous research institute under India's Ministry of Finance.

“Not only corporate hospitals, but also informal health providers are highly concentrated in an around metro and class one towns," said Datta.

Owing to the focus, the infrastructural development has also picked up pace in various other cities apart from metropolitan cities. As the Tier 2 cities growing, as per estimates they have attracted more than $1 million investments in recent past.

“As alternative centres of growth, counter magnetic cities attract migrants, counters population explosion and can be the hotbed for new ideas and innovations.

Moody's lowered its 2019 GDP growth forecast for India to 5.6%. While it expects this to pick up in 2020 and 2021 to 6.6% and 6.7% respectively, the pace of growth still remains lower than the past. These counter magnetic cities will help kick start and rejuvenate an economic regeneration through business models based on disruptive technologies and thus, help create thousands of jobs and propel economic growth, said Ashwajit Singh, Managing director, IPE Global, an international development consulting organisation.

“As hotbeds for young wealth creators, these cities with a good connectivity to Major cities will also help boost both transport and economic connectivity. Thus, the government should consider giving priority to such cities when allocating funding for development of land, housing and infrastructure," he said.

The other cities in the top 10 list were three cities from China, one each from Nigeria, Oman, UAE and Vietnam. (Source: Livemint)

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