India's small and medium towns should become drivers of change

By Arup Mitra, Ayush Singh*
The million plus cities and other large cities comprise the bulk of the urban investment and undertake a wide range of economic activities. Migrants from all economic spheres are therefore, attracted to these cities for earning their livelihood and experiencing upward mobility. Even an informal sector worker gets better off by moving to a large city compared to a small town. Though the level of congestion and other diseconomies are enormously large in large cities, fresh rounds of investments keep pouring in, which in turn shift the curves representing the economies and diseconomies of scale. As a result, the optimal city size keeps increasing with every round of fresh investment flowing into the city.
What happens to the thousands of small and medium sized towns? To begin with, very few of them have strong drivers of growth. Except the satellite towns, which are close to the large cities and receive parts of the economic activities spilling over from the large cities, there is a dearth of economic dynamism in these towns. The youth population in these towns hold a great potentiality but due to the lack of opportunities they are not able to realise their aspirations and dreams. Some of them migrate to the large cities and those who cannot, settle down with compromised earning opportunities.
It is high time that the urban policy in India must try to address the youth issues in small and medium sized towns. We understand that out-migration is after all a loss to the growth potential of the place of origin. Besides, those who cannot migrate may have to simply lose the potential and may not be able to contribute to the so-called demographic dividend that we have been boasting off for a very long time.
If each city/town emerges as a production centre of a specialised activity, it becomes easier to pursue the rationale of inclusive growth. Else, the lopsided growth with rising spatial inequality would be an obvious outcome. In the long run many of these urban centres will not be in a position to sustain themselves. Regional inequality aggravating the economic inequality will threaten the growth and prosperity of a nation.
The political representatives from such small and medium sized towns owe a huge responsibility in making such urban spaces productive. Instead of using the youth power simply as vote banks, they need to be in a constant dialogue with the youth for creating opportunities and brining in investible resources. The youth will have to be trained in terms of entrepreneurial skill so that product innovation can be pursued in cost efficient ways. Accessibility to new technology and credit and marketing assistance are indeed important, but more pertinent is the dissemination of information which can motivate the youth to innovate newer products from time to time.
The other endeavour which must be pursued relates to the employability of the youth. Vocational and other job-oriented training centres must emerge on a large scale to enhance the skill levels from time to time. The lack of quality institutions does not motivate firms to recruit the youth from small urban centres directly. Most of the placement centres and the platforms offering direct confluence between the employers and the job seekers are concentrated in relatively large cities. Without being compelled to migrate to the large cities how the youth can be brought to the mainstream of the growth process, holds the key to the success of inclusive growth. After all, India will never be able to experience modernisation and urban transformation unless the mainstreaming of medium sized and small towns happens prevalently. And for this, a political will is a must.
The pandemic has brought misery but at the same time it offers opportunities to think beyond the stereotypes. If online services can be hired by the companies, why cannot the youth from small towns be at the forefront? Obviously, employability and good infrastructural support to deliver the online services are the key challenges. In this regard what initiatives the political representatives are contemplating upon? At least, what efforts have been initiated in engaging the youth with dialogues and offering new motivations to them?
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*Respectively: Professor, Institute of Economic Growth, Delhi; Student and Freelancer, Mau, Uttar Pradesh