Page 98 - Nuvama | IC Report 2023

• MANUFACTURING • NEW ENERGY • URBANISATION • CONSUMPTION PREMIUMISATION • EQUITY SAVINGS CULT

Urbanisation: Agglomerating growth

Urbanisation is essentially a socioeconomic process marked by an increase in the size and population
of urban dwellings. It is accompanied by sweeping changes in occupations, lifestyles, culture and
spending behaviours, potentially altering the demographic and social structures of both urban and
rural areas.

Share of population living in urban areas 60% India China Austria 600M
Exhibit 1: 100%
Urbanisation Brazil Japan United States Qatar Africa
increases Norway Asia
with incomes 80% Italy Ireland Europe
Switzerland
North America
Oceania
South America
40%
1.4B
20%

0%
Population
$80,000
$40,000
$589
GDP per capita $120,000 Dots sized by
Source: OWID based on UN World Urbanization Prospects (2018), Maddison Project Database 2020 (Bolt and van Zanden (2020)), Nuvama Research
During the process of urbanisation, cities emerge as centres of of economic activity and innovation.
Big rural cohorts agglomerate into towns and big towns morph into cities. Eventually, these urban
centres develop as hubs for the flow of transport, trade, and information. National wealth begins to
concentrate in urban areas. Private and public services of high quality become available, whereas rural
areas typically lag with access to only the most basic services.

Contours of urbanisation in India

Villages – and rural areas at large – have been long regarded as the soul of India. That was true in the
Urbanisation in sense that 80% of India’s population lived in villages at the time of independence. That has changed
India has picked a great deal since.
up; even so, there
is huge potential Urbanisation picked up owing to a host of several factors such as migration, economic development,
demography and government policies, and is now close to 35%. Meanwhile, urbanisation itself has
undergone a step change; it is now characterised by increasing size and scale. For instance, the area
under urban territory has grown rapidly over the past few decades. In fact, during 2001–11 (latest
census period), the number of villages stagnated, whereas new towns mushroomed.

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