Page 103 - Nuvama | IC Report 2023

INDIA: THE 5D ADVANTAGE

• For households, better access to healthcare facilities, higher quality of education, and other
basic amenities such as electricity and cooking fuel make urban areas attractive.
• For government, public utility per unit of infrastructure spending (roads, flyovers, metro, etc) is
very high. In that sense, an emerging nation such as India can provide better facilities to a large
number of people at a relatively low cost.

Urbanisation wave coming

120
Exhibit 8:
Entrepreneurship
thrives in
(Urbanisation rate, %) 80
urban areas
100

60

40

20

0
0 10 20 30 40 50 60 70 80 90
Global entrepreneurship Index
Source: World development indicators, World Bank, Nuvama Research

In a nutshell, as economic opportunities expand, India is likely to see an accelerated wave of
urbanisation in the coming decade or so. In a way, urbanisation is both a driver and an outcome of As economic
expanding economic pie – a virtuous cycle of sorts. And given that India’s population is dominated by opportunities
youth, the coming wave of urbanisation would shape spending behaviour of the population. expand, India
shall see an
Last but not least, urban centres have certain underappreciated knock-on effects. They tend to see accelerated wave
higher participation of women in the workforce, which enhances both the capacity and the need of of urbanisation,
a household to spend. At the same time, urban centres tend to promote a culture of lifestyle-related which has
spending, which drives premiumisation of consumption over time. knock-on benefits

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