Urban Growth, Housing and Economic Development: The Case of India

Abstract

This paper examines some interrelations of urban growth, housing and economic development in India (interrelations which seem to obtain in other poor countries as well, especially in South Asia). It presents some estimates of the existing stock of housing, per capita living space, housing costs, likely growth of urban population, housing needs, and investment requirements to meet these needs to the year 1981 in India under alternative sets of assumptions, and it evaluates current thinking on the subject, suggesting alternative theoretic perspectives and planning policies. Urban growth refers to the absolute growth of population in urban areas (defined as towns and cities with 5,000 or more persons and conforming to some other criteria specified in the Indian Census). Urbanization, defined as the relative growth of urban to total population, may be increasing, stationary or decreasing while urban growth is rapid. Our concern is with uban growth and only inferentially with urbanization. Rapid population growth and large scale migration from rural to urban areas are causing unprecedented urban growth and acute crowding in the cities. Given these demographic and ecological trends, given present thinking and policies on housing, urbanization, and economic development among many experts and policy makers, and given present costs of structures, site development and utilities, housing shortages are going to become more acute in the foreseeable future. The immediate future for India and most other poor lands holds the very real prospect of bigger and worse slums, absolutely and relatively. Urban growth, like population growth, stimulates consumption and investment demand. If supply functions of other factors of production are reasonably elastic, increased labor supplies due to natural growth and inmigration can be combined with increasing supplies of other inputs to meet expanding demand. If other inputs are relatively inelastic, rapid rates of labor growth cause demand to outstrip supply of goods and services, resulting in inflationary pressures. The more welfare-oriented a society, the