YAIKHOM SIDDHARTHA (21048) & NIKHIL B (21004)

THESIS: ECONOMIC ASPEST OF INDIA URBAN

INFRASTRUCTURE
INTODUCTION
India is developing & urbanizing in such a fast phase, According to the
McKinsey report 40% of INDIA will be urbanized so it is important for us to
know what are factor & better understanding of economic process and
planning is necessary to make India more productive & better place to live.

One of the factors for urbanization is rapid development in infrastructure, we

can say it is the backbone of urbanized India, without it urbanization is not
possible

Our vision of India’s future should be both comprehensive and harmonious. It

must encompass all the raid aspects that constitute the life of the country
and its people. It must balance and synthesize all the divergent views and
forces that compete in the pursuit of self-fulfillment. It must be based on an
objective assessment of facts and a realistic appraisal of possibilities, yet it
must rise beyond the limitations of past trends, immediate preoccupations
and pressing challenges to perceive the emerging opportunities and
concealed potentials.

WHAT WIIL BE OUR WORK

• Future Vision of India & Challenge Ahead

• Human Development

• Infrastructure Development (METRO TRAIN ,ROAD,

HGWAY,EXPRESSWAY ETC)

• Tread analysis Statistic report etc

• Comparison of Metropolitan cities

• Example of cities

• Peace & security

 • Governance

• Conclusion

OBJECTIVE OF STUDY
To find the possible aspect of infrastructure which contribute in India
economy. The study should be useful for future economic analysis

Literature reviews

infrastructure play
Does

role in urbanization:
evidence from India.

Abstract

The paper primarily focuses the role played by infrastructure in determining the level of
urbanization in India and across its states. The analysis is based on construction of composite
infrastructure development index by applying principal component analysis and then integrates
the same with degree of urbanization. We have used cross-sectional data of Indian economy and
it pertains to past quarter decades. The findings confirmed that infrastructure has a significant
role in determining the level of urbanization in India. It finally concludes with suggestion that
India needs a broad based policy to increase the level of infrastructure in the interest of
urbanization in particular and overall balanced development in general.

JEL Classification: C51, H54, 018

I. INTRODUCTION

An achievement of balanced regional development is on of the outstanding objectives in any

countries in the world. The attainment of this objective is, however, far away in India. There
exist large-scale regional disparities across its states and regions. In fact, it is observed that there
is significant variation between urban and rural development in the state itself. This is mostly
because of variation of resources and the lumpy policy of the government. While about seventy
per cent of its population live in rural economy, its contribution to GDP is about twenty per cent
only. The probably reason is that rural economy is very predominant in agriculture and
agriculture's performance is substantially low as a result of modest productivity, lack of
modernization, slow diversification, stumpy availability of infrastructure, non-availability of
rural non-farm opportunities and an existence of disguised employment.

One way to maintain the balance development in the economy is to keep stress on 'urbanization'.
Urbanization transfers resources from rural, which ate in the form of miss utilized, under utilized
and unutilized, to urban centres and simultaneously, brings resources, through rural-urban
linkage, to the rural economy for its development. It is considerably true that urbanization
becomes the key for reconstructing the entire economy, as it changes the sectoral composition of
output, income and employment. Its progress more or less depends upon the advancement of
urban economy, which rides on the expansion of industrialization in the country. But
industrialization or the level of industrial development relies on the accessibility of resource
base, level of technology, explicit and implicit government intervention and the availability of
infrastructure in the economy (Henderson, 1999; Lee, 1988). Keeping in above back drop,
present paper here explores the relationship between infrastructure and urbanization in the Indian
economy.

The rest of the paper is organized as follows: Section II discusses the concept and importance of
infrastructure. Section III describes the concept and importance of urbanization. Section IV
highlights the methodology and data descriptions. Section V finally concludes with policy
implications thereof.

II. INFRASTRUCTURE: CONCEPT AND IMPORTANCE

The importance of infrastructure for economic development could hardly be gainsaid, as the
superstructure of a nation's overall wealth hinges on it (Ferrerira and Issler, 1995; Holtz-Eakin
and Schwartz, 1995; Day and Zou, 1994; Easterly, 1993). It usually defines as underlying basic
buildings, institutions and facilities or other essential elements that are necessary to sustain and
enable economic growth in the economy (Sanchez-Robles, 1998; Canning et al., 1994). In other
words, infrastructure represents as broad spectrum of activities and services without which no
activity can be undertaken in the economy. It plays a key role in our society and constitutes the
wheels, if not the engine of development (Prakash, 2005). Infrastructure increases economic
productivity, gains degree of specialization (Bougheas et al., 1999; Henderson, 1988), lowers
production costs (Romer, 1987), improves quality of life, alleviates poverty (World Bank, 1997),
raises international competitiveness, attracts foreign investment and helpful in urbanizing the
economy (Henderson, 2002). In fact, the pay-off from better infrastructure services goes beyond
reducing technical inefficiencies and financial losses (Barro, 1990). An adequate quantity,
quality and reliability of infrastructure are thus important preconditions for overall economic
growth. Infrastructure's linkage to the economy is very multiple and complex, as it affects
production and consumption directly, creates positive and negative spillover effects and involves
large inflows of expenditure (Goel, 2002). Infrastructure investment generally works through
employment multiplier, income multiplier and investment multiplier.

An economy's infrastructure network, broadly speaking, is the very socio-economic climate

created by the institutions that serve as conduits of commerce. Some of these institutions are
public others are private. In either case, their roles can be conversionary-helping to transform
resources into outputs or diversionary- transferring resources to non-producers. Its role is critical
in reducing natural inequality among different regions within a country. Infrastructure can be
categorically classified into three broad groups such as physical, social and financial (Ghosh and
De, 2004a). Physical and financial infrastructure helps the movement of direct productive
activities and thus, improves the physical resource base in the economy. Social infrastructure, on
the contrary, improves the human resource base in the country.

In the developing countries, it considers as a pace setter of economic growth and one of the most
important determinants for economic development. It affects economic development through
demand side and supply side. On the demand side, it opens up the possibilities of investment by
making availability of necessary inputs and services, opening up the size of the market and
increasing the supply elasticity and efficiency of factors of production. On the contrary, supply
side gives emphasis on development of infrastructure that helps in mobilizing potential saving
and hence, translating them into productive investment (Demetriades and Mamuneas, 2000). It
may be truly said that economic infrastructure certainly provides infrastructure to the economy
on which the superstructure of economic activities can be built-up.

The World Bank (1994) focused that infrastructural development has a strong positive link with
level of GDP and infrastructure stock per capita. As we have mentioned earlier, infrastructure
itself consists of different sectors and some of these sectors have direct impact on the workings
of business enterprises and others ate important for the societal point of view. Therefore, it needs
to be developed on a concurrent basis. The relationship between infrastructure and economic
development may be analyzed by focusing on its impact on the basic determinants of
development particularly through its link with capital formation and technological change. The
close link of factors, which determining the supply of capital with various items of infrastructure,
is quite obvious especially in the case of financial institutions. They are necessary both for
mobilizing savings and providing capital for agriculture & industrial development. The most
significant contributions of infrastructure towards economic development are its impact on the
availability and supply elasticity of factors of production, size of the market and the level of
urbanization in the economy (Pradhan 2005).

Over and above, infrastructure continues to be a serious constraint on country's economic growth
potential (GOI, 1999-2000) and is a vital for accelerating economic development in the economy
(Raghuram et al., 1999; Kapila and Kapila, 2002). History suggests that any country or regions,
which have industrialized and urbanized rapidly had infrastructure developed first. In the
subsequent section, we consequently establish the linkage between infrastructure and
urbanization in the economy.
III. URBANIZATION: CONCEPT AND IMPORTANCE

Urbanization defines as a process, when a nation can go in their transition from agrarian to
industrial society (Rao et al. 2004; Davis, 1972). In other words, it delimitates as a process of
massive shifts of labour and capital from predominantly rural to urban areas/ activities. It is an
index of modernization and largely associated with economic growth and development (Prakash,
2005). Urbanization is a natural part of development and substantially helpful for poverty
alleviation in the rural areas (Fan et al., 2005). Different levels of urbanization, however, reflect
different degrees of modernization and development in the economy (Prasad, 1995). It is a multi-
dimensional process and to a large extent, it depends upon the incentives for industrial and
service sector development. Supporting to this, Mills and Becker (1986) pointed out that
"urbanization is an inevitable process that experienced by all nations in their transaction from
agrarian to industrial and service societies and is a necessary factor behind the economic
growth". Capital accumulation, technological change and the growth of socio-economic
infrastructure seem to be the most important determinants of this shift (Kundu, 2004).

It is true that in a growing economy there is mounting demand of industrial and service sector
products. Accordingly, there is spontaneous increase in industrial and service sector production
and hence, employment generation in the economy. This also follows increase of service
facilities for various purposes like distribution of increased output, financial management
through banking and financial institutes as well as civic services for the population experiencing
increase in income levels (GOI, 2003). Economic development, therefore, foretells
industrialization and that promotes the concentration of people in the urban areas, where
maximum attempt is made to economize the land inputs (i.e. the land requirement per unit of
output being less than the agricultural sector). In the modern world, problem of large urban
concentrations affects not only in the advanced countries but also all the areas with dense
population and so in large cities. In a mature system of cities, standardized manufacturing
production trends to be de-concentrated into smaller and medium size metropolitan areas (Hicks,
1974). But the production in large metropolitan areas focuses on services, research and
development (R & D) and new products (Jacobs, 1969). The problem in today's developing
countries is that they appear to be strong bias towards excessive concentration (Visaria, 1997).

As you know there is striking difference between more developed and less developed countries
in the globe with regards to the pattern of urbanization. While most of the population of the less
developed regions currently lives in rural areas, the bulk of the population of the more developed
regions resides in urban areas. But developing countries today face greater urbanization
challenges than developed countries faced. It is observed that the growth rate of urban population
is much higher in less developed countries in contrast to more developed countries (UNDP,
2001). Coming to India, it becomes the second largest country in the world in terms of maximum
urban population. Her size of urban population exceeds even the total population of each country
in the world except China. It is observed that India's urban population has been increasing trends
since 1901. India had only 10.8% of urban population in the beginning of nineteenth century and
substantially increased to 27.8% in the turn of the century (See Table 1).

This is about two and a half times increase during the last 100 years. In the state-wise, rate of
urbanization is substantially high in Tamil Nadu, Maharashtra, Gujarat, Karnataka, Andhra
Pradesh, Kerala, Punjab and West Bengal and substantially low in Himachal Pradesh, Assam,
Bihar, Orissa and Uttar Pradesh. This represents that there exists large-scale variations across the
states and its progress is substantially high in southern states in contrast to other parts of the
country (See Figure 1).

[FIGURE 1 OMITTED]

The rate of urbanization is relatively high in more urbanized states in contrast to less urbanized
states (Mohan, 1996). The above features are very natural for developing countries like India.
This is because earlier studies suggest that urban concentration increases in the early stages of
economic development as part of increasing regional disparities and then decreases in later
stages of development as part of decreasing regional disparities or regional convergence (El-
Shakhs, 1992; Parr, 1985; Wheaton and Shishido, 1981; Williamson, 1965). It further suggests
that in the early stages of development when resources are scarce (especially infrastructure) it is
impossible to investment enough in public infrastructure to support widespread urban
agglomeration and a system of interconnected cities joined by paved highways rail transit and
communication (Hansen, 1990). An efficient allocation of economic infrastructure requires
concentration in just one or two cities initially, conserving on spending that would go instead to
link cities or develop other cities. Such concentrated investment induces immigration and
industrialization of local cities and increase urban concentration. With supplementary economic
growth, the country will develop some appropriate institutions and a pool of skilled technocrats.
The country ultimately will be able to invest in hinterland regions, allowing other major urban
centres as well as smaller and medium-size cities to develop (Henderson, 2002). It is believed
that the demographic trends of Indian urbanization are largely accompanied by change in the
management and financing of urban development (Becker et al., 1992), which is as a result of
substantial progress in industrialization, globalization and an improvement in infrastructure in
the economy. But here we highlight the issue of infrastructure only.

IV. METHODOLOGY AND DATA DESCRIPTIONS

The basic objective of this paper is to establish the linkage between infrastructure and
urbanization in the economy. To analyze the same, we have developed an econometric model,
which is as follows:

URBAN = {CIDI} ... (1)

CIDI = 1/3 [PIDI + SIDI + FIDI] ... (2)

Where, URBAN = Degree of urbanization (in percentage).

CIDI = Composite Infrastructure Development Index, which is an average of physical, social and
financial infrastructure.

PIDI = Physical Infrastructure Development Index, which is set of physical infrastructure like
transport facility (road and railways), gross irrigated area, per capita consumption of electricity
and telecommunication.

SIDI = Social Infrastructure Development Index, which is set of social infrastructure such as
literacy rate, infant mortality rate and residential houses.

FIDI = Financial Infrastructure Development Index, which is set of financial infrastructure viz.
credit deposit ratio of nationalized banks, share of state tax revenue in NSDP and post offices.

For deriving each dimension index, one requires appropriate weights for the facilities under each
category. For this, we apply well-known multivariate principal component analysis (PCA). The
method of PCA is a special case of more general method of factor analysis. Its aim is to
construct, out of set of variables, [X.sub.i]'s (I= 1, 2 ..., n), a new set of variables ([P.sub.i])
called principal components, which are linear combination of the X's (Hotelling, 1933;
Koutsoyiannis, 1978). In mathematical, it could be represented as follows:

[P.sub.1] = [a.sub.11][X.sub.1] + ... + [a.sub.1n][X.sub.n]

[P.sub.2] = [a.sub.21][X.sub.1] + ... + [a.sub.2n][X.sub.n].

...

[P.sub.m] = [a.sub.m1][X.sub.1] + ... + [a.sub.m][X.sub.n] ... (3)

Putting it in matrix form, the above expressions can be further expressed as:

[P.sub.i] = [m.summation over (i=1)][n.summation over (j=1)][a.sub.ij][Z.sub.ij] ... (4)

Where, [a.sub.ij]'s are called loadings of the factors (principal component). These are chosen in
such a way that the constructed principal components satisfy two conditions: (a) the principal
components are uncorrelated and (b) the first principal component [P.sub.1] absorbs and
accounts for the maximum possible proportion of the total variation in the set X's, the second
principal component absorbs the maximum of the remaining variation in the X's (after allowing
for the variation accounted for by the first principal component) and so on. In this procedure, the
data matrix is transformed to a new set of uncorrelated variables (principal components) that
accounts as much of the variation as possible in descending order. The method of PCA can be
applied by using the original variables or the standardized variables. By applying standardized
methods, the above expression can be additionally represented as:

[MATHEMATICAL EXPRESSION NOT REPRODUCIBLE IN ASCII] ... (5)

The present study worked out the composite index by the help of standardized method only, as
this process involves unit free measurement. The study further applies first principal component
analysis to capture the maximum proportion of the variance in the original variables. The data
used under the study are secondary in nature and have been collected from following sources:
Economic Survey, Government of India; Statistical Abstract of India, Government of India;
Centre for Monitoring Indian Economy (CMIE); and India Infrastructure Database (Ghosh and
De, 2004b). The model estimation follows India's state-wise data of four cross-sectional years
viz. 1971, 1981, 1991 and 2001.

V. RESULTS AND DISCUSSION

The study initially presumed that increase in the availability of infrastructure would increase the
level of urbanization in the economy. To establish the same, we first developed a composite
infrastructure development index (CIDI) and then integrate the same with urbanization.

Starting with infrastructure development, it is observed that India's progress on overall

infrastructure has been increasing over the years. The CIDI, which is an average of physical,
social and financial infrastructure, is of 3.88 in 1971 and has been increased to 4.11 in 1981, 4.33
in 1991 and 4.50 in 2001 (See Table 2). But the availability and increase of infrastructure is not
uniform across the states of India. It is substantially high in the states like Kerala, Punjab, Tamil
Nadu, Karnataka, Gujarat, Maharashtra, Andhra Pradesh and West Bengal and considerably low
in the states like Assam, Bihar, Himachal Pradesh, Orissa and Uttar Pradesh.

The composite index further reflects that India's quantum of infrastructure has been significantly
improved over the years and that's visible in most of the states (See Figure 2). Now by
comparing the state-wise picture of infrastructural development index with the degree of
urbanization, it is observed that both are consistently moving in the upward direction. This
reflects that the progress of infrastructure certainly determine the level of urbanization in India
and across its states.

[FIGURE 2 OMITTED]
Coming to empirical investigation, we applied regression technique. It is followed with linear
functional form and succeeded by Ordinary Least Squares method. The econometric estimated
results are presented in Table 3. The results confirmed that infrastructure, which is the set of
physical, social and financial, contributed significantly to urbanization in India. Put it differently,
it indicates that increase in infrastructure do exert a strong upward pressure on Indian
urbanization. The estimated coefficients contemplates that a one percent increase infrastructure
leads to increase of urbanization by 2.27 units in 1971, 3.54 units in 1981, 4.54 units in 1991 and
5.16 units in 2001. If you observe these units of increment, one can find that the contribution of
infrastructure towards urbanization has been substantially increasing since 1971. The value of t-
statistics intends that infrastructure and urbanization are statistically significant at 1% level in all
the four cross-sectional years.

The coefficient of determination ([R.sup.2]) further indicates that about 27% of the systematic
variations in the level of urbanization during the year 1971 have been explained by the
availability of infrastructure in the economy. And that variation has been radically improved over
the years since 1971. While [R.sup.2] is 41% in 1981, it has increased to 55% in 1991 and 55%
in 2001. The improvement of [R.sup.2] indicates that the casual link between infrastructure and
urbanization in India has been stronger over the years. The value of [R.sup.2] is also statistically
significant during all the four years. We have also studied that the relation between infrastructure
and urbanization by pooling the data of four cross-sectional years. The estimated results also
confirmed the positive association between infrastructure and urbanization (See Table 3). Here,
the [R.sup.2] ensured that about 47% of systematic variations in the level of urbanization have
explained by the availability of infrastructure in India.

VI. CONCLUSION AND POLICY IMPLICATIONS

The study investigated the impact of infrastructure on urbanization in India. By using the state-
wise data of past quarter decades, the estimated results confirmed that infrastructure has a
significant positive impact on urbanization. Both are very consistent in the Indian economy over
the last four decades. It is assumed that without increase of infrastructure, urbanization in India
would be much lower today. But the critics say that at what level of urbanization India has
achieved so far, it is comparatively low as per the country's need and in contrast to other
emerging countries in the world. Since urbanization has a very positive role in rural economy in
the form of agricultural development, non-farm development and poverty alleviation, there is
urgent need to enhance the country's level of urbanization. This requires substantial improvement
in infrastructure along with more industrialization in the economy. Though industrialization of
industrial development plays a major role in urbanization, to set the industrial sector in a right
way, infrastructure needs to be set right first. In fact, infrastructure plays a pivot role, as it
directly enhances urbanization and indirectly through industrialization. A specific stress must be
given towards qualitative infrastructure like good roads, railways, ports, airports, etc. so that they
can oil our wheels of progress. This requires a continued government support in the form of
appropriate pricing policies, legal and administrative framework, decentralization of public
expenditure and encouraging capital markets for resource mobilization in the infrastructural
investment. Since public sector alone cannot deliver all that is required in the every area of
infrastructure, the country required public-private partnership at the urgent. To summarize, there
is need of broad based policy to increase the availability of infrastructure in India and across its
states in the interest of mounting urbanization in particular and overall balanced development in
general.

World Bank (1994), World Development Report: Infrastructure for Development, Oxford
University Press, New York.

World Bank (1997), "Investing in Infrastructure: A Growth Strategy That Favours the Poor",
http://hco.worldbank.org/html/hcovp/poverty/contents.html.
Table 1
Trends of Urbanization in India

Year [X.sup.1] [X.sup.2] [X.sup.3] [X.sup.4] [X.sup.5]

1901 1916 25.9 10.8 -- --

1911 1908 25.9 10.3 0.0 -0.46
1921 2048 28.1 11.2 0.8 0.87
1931 2220 33.5 12.0 1.7 0.71
1941 2422 44.2 13.8 2.8 1.50
1951 3060 62.4 17.3 3.5 2.54
1961 2700 78.9 18.0 2.3 0.40
1971 3126 109.1 19.9 3.2 1.06
1981 4029 159.5 23.3 3.8 1.72
1991 4689 217.6 25.7 3.1 1.02
2001 5161 284.5 27.8 2.7 0.82

Note: [X.sub.1]: Number of towns; [X.sub.2]: Urban Population

(in millions); [X.sub.3]: Percentage of Urban Population;
[X.sub.4]: Annual exponential growth rate; [X.sub.5]: Rate
of urbanization.

Source: Provisional Population Totals (Various Issues), Census

of India, Government of India.

Table 2
State-wise Trends of Urbanization and Infrastructure
Development In India

Urban

States 1971 1981 1991 2001

Andhra Pradesh 19.31 23.32 26.89 27.08

Assam 8.82 9.88 11.1 12.72
Bihar 10.0 12.47 13.14 13.36
Gujarat 28.08 31.10 34.49 37.35
Haryana 17.66 21.88 24.63 29.00
Himachal Pradesh 6.99 7.61 8.69 9.79
Jammu & Kashmir 18.59 21.05 23.83 24.88
Karnataka 24.31 28.89 30.92 33.98
Kerala 16.24 18.74 26.39 25.97
Madhya Pradesh 16.30 20.30 23.21 24.92
Maharashtra 31.17 35.03 38.69 42.40
Orissa 8.41 11.79 13.38 14.97
Punjab 23.73 27.68 29.55 33.95
Rajasthan 17.63 21.05 22.88 23.38
Tamil Nadu 30.26 32.95 34.15 43.86
Uttar Pradesh 14.02 17.95 19.84 21.02
West Bengal 24.75 26.47 27.48 28.03
India 19.91 23.34 25.71 27.78

CIDI

States 1971 1981 1991 2001

Andhra Pradesh 3.66 4.08 4.19 4.54

Assam 1.43 1.86 2.17 2.25
Bihar 2.51 2.87 2.92 3.07
Gujarat 4.29 5.42 5.75 5.74
Haryana 5.21 5.55 5.50 5.64
Himachal Pradesh 2.25 3.55 3.89 4.20
Jammu & Kashmir 2.95 3.40 3.49 3.91
Karnataka 4.66 5.21 4.98 5.05
Kerala 6.79 6.98 6.60 6.84
Madhya Pradesh 2.86 2.87 3.09 3.29
Maharashtra 5.74 6.04 5.97 5.99
Orissa 2.52 2.70 3.03 2.98
Punjab 6.41 3.42 6.30 6.68
Rajasthan 3.03 3.39 3.35 3.37
Tamil Nadu 5.61 5.85 5.70 6.02
Uttar Pradesh 2.04 2.54 2.92 2.88
West Bengal 4.08 4.13 3.76 3.99
India 3.88 4.11 4.33 4.50

Note: URBAN: % of urban population; and CIDI: Composite

Infrastructure Development Index.

Source: Census of India, Government of India; Economic Survey,

Government of India; Statistical Abstract of India; Centre for
Monitoring Indian Economy (CMIE); and India Infrastructure
Data Base.

Table 3
Estimated Results of Urbanization

Estimated Standard t- Probability

Year Variables Coefficients Error Statistics Level

Constant 10.25 3.80 2.701 0.016

1971 CIDI 2.266 0.93 2.427 0.027
[R.sup.2] 0.269 (0.223)
F 5.888 0.027
Constant 7.211 4.62 1.560 0.138
1981 CIDI 3.538 1.07 3.320 0.004
[R.sup.2] 0.408 (0.371)
F 11.019 0.004
 Constant 4.511 4.646 0.971 0.346
1991 CIDI 4.536 1.025 4.424 0.000
[R.sup.2] 0.550 (0.522)
F 19.574 0.000
Constant 3.143 5.469 0.575 0.574
2001 CIDI 5.163 1.164 4.435 0.000
[R.sup.2] 0.551 (0.523)
F 19.67 0.000
Constant 6.323 2.317 2.728 0.008
PD CIDI 3.992 0.525 7.50 0.000
[R.sup.2] 0.446 (0.438)
F 56.362 0.000

Note: CIDI: Composite Infrastructure Development Index;

[R.sup.2]: Coefficient of Determination; F: F-statistics;
and PD; Pooled data.
Gale Copyright:
Copyright 2007 Gale, Cengage Learning. All rights reserved

Does infrastructure play role in urbanization:

evidence from India
Indian Journal of Economics and Business, June, 2007 by
Rudra Prakash Pradhan
Table 1
Trends of Urbanization in India

Year [X.sup.1] [X.sup.2] [X.sup.3] [X.sup.4] [X.sup.5]

1901 1916 25.9 10.8 -- --

1911 1908 25.9 10.3 0.0 -0.46
1921 2048 28.1 11.2 0.8 0.87
1931 2220 33.5 12.0 1.7 0.71
1941 2422 44.2 13.8 2.8 1.50
1951 3060 62.4 17.3 3.5 2.54
1961 2700 78.9 18.0 2.3 0.40
1971 3126 109.1 19.9 3.2 1.06
1981 4029 159.5 23.3 3.8 1.72
1991 4689 217.6 25.7 3.1 1.02
2001 5161 284.5 27.8 2.7 0.82

Note: [X.sub.1]: Number of towns; [X.sub.2]: Urban Population

(in millions); [X.sub.3]: Percentage of Urban Population;
[X.sub.4]: Annual exponential growth rate; [X.sub.5]: Rate
of urbanization.

Source: Provisional Population Totals (Various Issues), Census

of India, Government of India.
Table 2
State-wise Trends of Urbanization and Infrastructure
Development In India

Urban

States 1971 1981 1991 2001

Andhra Pradesh 19.31 23.32 26.89 27.08

Assam 8.82 9.88 11.1 12.72
Bihar 10.0 12.47 13.14 13.36
Gujarat 28.08 31.10 34.49 37.35
Haryana 17.66 21.88 24.63 29.00
Himachal Pradesh 6.99 7.61 8.69 9.79
Jammu & Kashmir 18.59 21.05 23.83 24.88
Karnataka 24.31 28.89 30.92 33.98
Kerala 16.24 18.74 26.39 25.97
Madhya Pradesh 16.30 20.30 23.21 24.92
Maharashtra 31.17 35.03 38.69 42.40
Orissa 8.41 11.79 13.38 14.97
Punjab 23.73 27.68 29.55 33.95
Rajasthan 17.63 21.05 22.88 23.38
Tamil Nadu 30.26 32.95 34.15 43.86
Uttar Pradesh 14.02 17.95 19.84 21.02
West Bengal 24.75 26.47 27.48 28.03
India 19.91 23.34 25.71 27.78

CIDI

States 1971 1981 1991 2001

Andhra Pradesh 3.66 4.08 4.19 4.54

Assam 1.43 1.86 2.17 2.25
Bihar 2.51 2.87 2.92 3.07
Gujarat 4.29 5.42 5.75 5.74
Haryana 5.21 5.55 5.50 5.64
Himachal Pradesh 2.25 3.55 3.89 4.20
Jammu & Kashmir 2.95 3.40 3.49 3.91
Karnataka 4.66 5.21 4.98 5.05
Kerala 6.79 6.98 6.60 6.84
Madhya Pradesh 2.86 2.87 3.09 3.29
Maharashtra 5.74 6.04 5.97 5.99
Orissa 2.52 2.70 3.03 2.98
Punjab 6.41 3.42 6.30 6.68
Rajasthan 3.03 3.39 3.35 3.37
Tamil Nadu 5.61 5.85 5.70 6.02
Uttar Pradesh 2.04 2.54 2.92 2.88
West Bengal 4.08 4.13 3.76 3.99
India 3.88 4.11 4.33 4.50

Note: URBAN: % of urban population; and CIDI: Composite

Infrastructure Development Index.

Source: Census of India, Government of India; Economic Survey,

Government of India; Statistical Abstract of India; Centre for
Monitoring Indian Economy (CMIE); and India Infrastructure
Data Base.

Table 3
Estimated Results of Urbanization

Estimated Standard t- Probability

Year Variables Coefficients Error Statistics Level

Constant 10.25 3.80 2.701 0.016

1971 CIDI 2.266 0.93 2.427 0.027
[R.sup.2] 0.269 (0.223)
F 5.888 0.027
Constant 7.211 4.62 1.560 0.138
1981 CIDI 3.538 1.07 3.320 0.004
[R.sup.2] 0.408 (0.371)
F 11.019 0.004
Constant 4.511 4.646 0.971 0.346
1991 CIDI 4.536 1.025 4.424 0.000
[R.sup.2] 0.550 (0.522)
F 19.574 0.000
Constant 3.143 5.469 0.575 0.574
2001 CIDI 5.163 1.164 4.435 0.000
[R.sup.2] 0.551 (0.523)
F 19.67 0.000
Constant 6.323 2.317 2.728 0.008
PD CIDI 3.992 0.525 7.50 0.000
[R.sup.2] 0.446 (0.438)
F 56.362 0.000

How Indian Railways impact the Economy

Indian Railways has a wide network throughout the nation. With the help of this widely spread
railway networks, you can reach any place of India. Both passengers and freight can be
transported to anywhere of India by the help of Indian Railways. This also creates impact on the
Indian Economy. This article deals with how Indian Railways impact the Economy of India or
the impact of Indian Railways on the Indian economy.

India is a land of diverse culture as well as religion. In different parts of India, one can find
totally different tradition and cultural variations. To promote national integration and concentrate
the cultural diversity, the Indian Railways plays a vital role that also fulfills the transportation
needs of the country. It is true that, with this support, Indian Railways have also emerged as the
major strength of the Indian economy.

Distance covered by Indian Railways

Indian Railways covers total 63,140 route kilometers as on 31.3.2002, including broad gauge
(total 45,099 kilometers), narrow gauge (total 3,265 kilometers) and meter gauge (total 14,776
kilometers). It is considered as the main part of the India’s transportation system.
Some major statistics related to Indian Railways:

• Wagons (units) - 2,16,717

• number of locomotives (operating) - 7,739
• Operating trains - 14,444
• Daily Passengers - 8,702
• Coaches - 39,236

Not only passengers, everyday, Indian Railways carry more than a million ton of freight traffic
encompassing around 6,856 numbers of rail stations. Being the primary infrastructural sector of
India, Railways has been developing to maintain a pace with the development of Indian
economy.

Though the huge investment required for the overall development of the Indian Railway system
has not been fully sanctioned but due to the budgetary support it is planning to develop its
infrastructural aspects.

Operating Zones and Production Units

Basically, the Indian Railway system is operated through several zones and other operating
divisions. Moreover, there are total six railway production units that are manufacturing wheels,
rolling stock, axles and many other related components to meet the annual requirement of
Railways.

Indian Railways Cash Surplus

In the last year, Indian Railways made a history by rendering a cash surplus before dividend of
Rs 20,000 Crores against Rs 14,700 Crores. The total annual passenger earnings have also
amplified by 14 percent whereas the total coach earnings have also noticed a rise of 48 percent.

Further, a quantum jump in the freight transportation business is another important fact of the
year that is worth mentioning about. This is how Indian Railways impact the Economy.
Following are various stats, facts and figures on the economy and employment in India , picked out of newspapers
(mainly Hindustan Times), magazines (mainly India Today), the BBC and various sources on the web. These figures
are not meant to be comprehensive lists, but rather statistical trivia or factual snippets. For basic general facts and
figures about India as well as several Indian states, please see the Quick Reference popups on the right hand side of
this page, or go to the main page of India statistics, facts and figures . For a full list of links to our statistics pages,
see the About India index or the bottom of the right navigation bar on this page.

The stats on this page are divided into following sections:

Figures on employment
Data on employment in IT & BPO (Business Process Outsourcing)
Statistics on income, wages, labour force etc
Indian IT industry & BPO (Business Process Outsourcing) related data
Statistics on economic growth and GDP in India
Data on government income and spending
Various economic statistics and figures
Stats on Indian import, export and domestic market

some figures on employment

- number of regular employees of Indian Railways in 1997:
1,583,614 (standing world record 2004) [GWR]
- number of people applying for 22,000 jobs advertised by the Indian
Railway (2003): 740,000
- planned number of staff of Reuters news agency to work in Bangalore
by 2006: 1,500 (or 10 % of Reuter's total workforce) [BBC Oct 04]
- number of Dalits employed to clean toilet pits (& remove night soil) in
Bangalore: 10,000 - 15,000 estimate [BBC; Sep 2002]
- working population: 699.9 million [GTF; 2005]
- domestic workers in India: 14 million [approx 2003]
- women employed in rural areas: 31 % [approx 2003]
- women employed in cities: 11 % [approx 2003]
- people registered as unemployed with 936 employment exchanges: 41.6
million (beginning 2004)
- * people employed: about 480 million [AT Jan 07]
- unemployment in Himachal Pradesh: 120,000 people or 20 % [HT Apr
04]
- employment in the unorganised sector: 91.39 % of work force [approx
2003]
- employed in agriculture: 50 % (2003)
- employment growth in agriculture: 0.01 % (2003)

employment in IT and BPO (Business Process Outsourcing)

- * number of people employed in overall IT industry in India (end
2006): 1.3 million directly -- 3 million indirectly [BBC Jan 07]
- staff employed in ITES-BPO : 2002/03: 171,100 -- 2003/04: 245,100
(ITES-BPO: IT enabled Services - Business Process Outsourcing) [GTF;
2005]
- staff employed in outsourced customer service: 2002/03: 65,000 --
2003/04: 95,000 [GTF; 2005]
- annual employee attrition (staff turnover) in voice based BPO (i.e.
outsourced call centres): up to 70-80% in some voice BPOs [GTF; Jan
2006
 - * number of people applying at Infosys in Bangalore: 1.4 million in
2006 [BBC Jan 07]
- * number of workers hired by Infosys in Bangalore per year: 30,000
[BBC Jan 07]
- * people employed by three major Indian IT firms (Infosys, Wipro,
TCS): 2006: between 52,000 and 83,000 each-- 2001: between 10,000
and 20,000 each -- 1996: between 1,000 and 9,000 each [BBC Jan 07]
- * people employed abroad by major IT firms: Wipro: 11,000 -- TCS:
20,000 [BBC Jan 07]
- annual salary hike in IT services 2003: 14% [2004]
- * levels of pay for legal professionals in India as used in LPO
(Legal Process Outsourcing): 10% - 15% of that of US lawyers [DNA
May 06]
- * standard salary for call centre worker in India: around 1.2 lakh Rs
(120,000Rs or 1,600 GBP) per year or 10,000 Rs per year [BBC Jan 07]
- call centre salary in Gurgaon (in the state of Haryana, but more
considered a suburb of Delhi): 8,000 to 14,000 Rupees per month [2004]
- * number of members of WBITSA (West Bengali organisation
representing IT worker's rights): 500 [BBC Jan 07]
- * number of IT workers in West Bengal: 2006: 40,000 (incl. call centre
staff)
[BBC Jan 07] -- 2004: 20,000 [BBC Oct 04]

statistics on income, wages, labour force etc

- average per capita income (GNI): 470 US Dollar (2003)
- average per capita income in Bihar: 4,616 Rupees (approx 80 Euro)
- official minimum wage in Jammu & Kashmir state: 1,800 Rs per month
(or
60 Rupees per day, equiv to 1.2 Euro per day) for simple labourer
- official minimum wage in Himachal Pradesh: 65 Rupees per day
(simple labourer)
- population living on less than 2 USD per day: 41.4 percent [v2020; Apr
2003]
- average monthly wage: 179 USD [GTF; 2005]
- India's working age population (15-60 years): 610 million (estimate
2003)
- growth of India's labour force: 1.9 % per year [BBC Jul 04]
- growth of job creation between 1994-2000: 1.07 % per annum
- estimate of wage increase over the next four decades: 800 % (estimate
by IMF) [BBC Jul 04]
- number of cabin crew working for Air India: 1,600 [BBC, Jan 2006]
- salary of senior Air Hostess in India: up to 75,000 Rs per month [BBC,
Jan 2006]
- percentage of Air India's cabin crew being overweight or obese: 20 %
[BBC, Jan 06]
- expected increase of passengers in the Indian aviation market: approx
45 million over next 5 years [BBC, Jan 2006]
- monthly salary of 5 year old Police Officer in Chattisgarh: 2,500 Rs
(the boy took over the job from his father when he died, responsible for
filing and bringing tea) [BBC, Sep 2005]
- number of children working in Tamil Nadu districts of Kanchipuram
and Thiruvanamalai in silk industry: 10,000 estimate [BBC; Aug 2005]
- Indian child labourers: between 10.25 % to 19.90 % of all Indian
children aged 9-15 [BBC; Aug 2005]

Indian IT industry & outsourcing / off-shoring (BPO) related data

- * contribution to India's GDP by Business Process Outsourcing (BPO):
estimated for Financial Year 2007: 5.4% -- Financial Year 2006: 4.8%
[FE Jan 07]
- * exports of BPO services: 2006: 13bn GBP -- expected 2010:30bn
GBP [BBC Jan 07]
- * export of software services and IT-BPO in financial year 2006 -07
according to Nasscom: approx 16.3bn GBP (31bn USD) [FE Jan 07]
- * increase of world wide share of the global outsourcing market by
Indian companies: within the last 4 years from 0.5% to 7% [BBC Jan 07]
- revenue from BPO & call centres in fiscal year 2004-05: 5.2bn USD
[c/net; Jun 05]
- revenue from export of software and services industry in fiscal year
2004-05: 17.2bn USD [c/net; Jun 2005]
- total revenue in software industry in fiscal year 2003-04: 15.9bn USD
[GTF; 2005]

- export of goods and services of India's IT and outsourcing

industries in fiscal
year 2003-04: 7 billion GBP [BBC sep 04]
- revenue percentage of software industry exports 2003-04: 78% [GTF;
2005]
- contribution of outsourcing to India's total software exports: 29 %
[BBC sep 04]
- Bangalore's (Karnataka's state capital) revenue from overseas
outsourcing: 32 % of India's total overseas outsourcing revenue of 10 bn
Euro [BBC Sep 04]
- * value of shares sold in 1999 by Bangalore based company Infosys:
approx 37 million GBP [BBC Jan 07]
- * current market value of major IT firms: Infosys: 17 billion GBP --
Wipro: 13bn GBP -- TCS: 13bn GBP (all figures approximately, with
exchange rate 1.9 USD = 1 GBP) [BBC Jan 07]
- * current annual revenue of major IT firms: Infosys: 1.1 billion GBP --
Wipro: 1.2bn GBP -- TCS: 1.6bn GBP (all figures approximately,
with exchange rate 1.9 USD = 1 GBP) [BBC Jan 07]
- * area of the Infosys campus in Bangalore: 40 acres [BBC Jan 07]
- * number of major international companies which have IT operations in
Bangalore: more than 500 [BBC Jan 07]
- * concentration of IT sector in Bangalore: 40 percent of the whole of
India's IT industry [BBC Jan 07]
- * population in Bangalore: estimate for 2015: 10m -- 2006: 6.5m --
1990: 2.8m -- 1970: 1.6m [BBC Jan 07]
- * expected future share by India of the emerging global KPO market:
70% of the estimated 17bn USD global KPO market (KPO: Knowledge
Process
Outsourcing) [DNA May 06]
more on e-commerce on telecom & IT stats page
 statistics on economic growth and GDP in India
- * growth of Indian economy for 2006-07: approx 9% [BBC Jan 07]
- * growth of Indian economy or GDP (Gross Domestic Product): 2005-
06: 9% -- 2006-07: 7.4% [DNA Jan 07]
- * economic growth in the manufacturing and industry sector (2005-06):
9.1 percent [DNA Jan 07]
- * economic growth in the IT and ITES sector: approx 20 percent [DNA
Dec 06]
- * economic growth in the agricultural sector: 6 percent [DNA Jan 07]
- * percentage of India's GDP coming from services, manufacturing and
industry:77 percent [DNA Dec 06]
- * contribution to India's economy by the nearly 70% of the
population living off the land: 23 percent [DNA Dec 06]
- * Gross Domestic Savings (GDS): 2005-06: 32.4% of GDP -- 2004-05:
31.1% of GDP
- * yearly foreign investment: 2006: 6.3bn GBP estimate -- 2005: 4.2bn
GBP -- 2004: 2.1bn GBP [BBC Jan 07]
- economic growth in 2003: about 7 %
- growth of India's economy in the year 2004 to March: 8.2 % (the
country's fastest expansion in 15 years) [BBC Jul 04]

some data on government income and spending

- Indian foreign exchange reserves: March 2005: 137.55 bn USD [Rediff;
Mar 05] -- mid Dec 2005: 144.05 bn USD -- end Dec 2005: 137.2 bn
USD [IInfoLine; Jan 2006]
- India's Gold reserves end Dec 2005: 5.27 bn USD [IInfoLine; Jan 2006]
- India forex reserves 2004: over 80 billion Euro (cash + foreign
investment)
- corporate tax rate: 35.88 % [GTF; 2005]
- VAT tax rate: 12.5 % [GTF; 2005]
- rate of inflation: 3.8 % [GTF; 2005] -- earlier about 6 % [BBC Jul 04]
- number of tax payers: 20 million (2 % of the population) [BBC Jul 04]
- money collected in income tax (per year): more than one trillion rupees
(17.6 bn Euro)
[BBC Jul 04]
- lowest rate of income tax: 10 % (at annual income between 50,000 and
60,000 Rs, equiv to 960-1150 Euro) [BBC Jul 04]
- top rate of income tax: 30 % (at annual income above 150,000 Rs,
equiv to 2880 Euro) [BBC Jul 04]
- increase of government 's gross tax collection for time period April -
October 2003: 8.89 % up from previous year
- increase of military spending by government with new budget Jul 04:
18 %, to 770 bn Rs (14.8 bn Euro) [BBC Jul 04]

various economic statistics and figures

- * India's share of global biotech market: approx 1.1% [DNA Jan 07]
- * revenues generated by the biotech sector: 2006: approx 61bn Rs
(1.5bn USD) -- 2005: approx 32bn Rs (780m USD) [DNA Jan 07]
- * number of companies comprising the biotech industry 2006: 280
[DNA Jan 07]
 - percentage of organised retail sector in total retail sales: 3 % [BBC, Oct
2005]
- number of shopping malls 5 years ago: 0 (no malls, only shopping
arcades existed) [BBC, Oct 2005]
- number of shopping malls functional or under construction in Gurgaon
2004: 8 [HT Feb 2004]
- number of big shopping malls 2005: 100 [BBC, Oct 2005]
- expected number of big shopping malls 2007: 360 [BBC, Oct 2005]
- richest Indian according to Forbes list of 587 billionaires 2004: Azim
Premji (58th place on list, net worth Feb 04: 5.4 bn Euro; Apr 04: 5.8 bn
Euro) [HT Feb 04]
- number of Indians in the Sunday Times 2004 list of the 1000 richest
people in Britain: 29 (of who the richest Indian is No 5 on the list: Steel
magnate Lakshmi Mittal,worth 3.5 bn GBP) [HT Apr 04]
- richest Indian woman: Kiran Mazumdar-Shaw of Biocon (1,887 crore
Rs, 230 million GBP) [HT Apr 04]
- average time it will take to get all clearances in Indian bureaucracy to
set up a new business: 88 days in India (as compared to 8 days in
Singapore and 11 days in
Hong Kong) [BBC Jun 04]
- average time it will take to clear all formalities to close a firm if it
becomes insolvent: more than 11 years in India (as compared to less than
7 months in Singapore and one year in Hong Kong) [BBC Jun 04]

stats on Indian import, export and domestic market

- * estimated value of the matchmaking and marriage industry:
Rs 50,000-80,000 crore (approx 6.25-10 bn GBP) [EB Jan 07]
- * growth of the matchmaking and marriage industry: 25% per year [EB
Jan 07]
- * number of marriages performed in India: 1 crore (10 million) [EB Jan
07]
- * minimum spending on weddings: by middle-income family in India:
approx Rs 140 lakh (34,000 USD) -- by equivalent American family in
the US: approx Rs 100 lakh (26,000 USD) [IND Dec 06]
- * value of the online matchmaking industry: financial year 2006-07:
expected 90 crore Rs (11.5m GBP) -- financial year 2005-06: estimated
58 crore Rs (7.4m GBP) [EI Jan 07]
more on online matchmaking industry see e-commerce (Telecom & IT)
- vehicle export: 221,000 (April - September 2003)
- cars sold in the month of August 2003: 53,177
- units sold by motorcycle company Hero Honda in 2003-2004: 2.07
million (with a turnover of 5,997 crore Rs, equiv to 1.15 billion Euro)
[HT Apr 2004]
- India mercury imports: 531 tonnes per annum
- India's consumption of globally produced mercury: 50 %
- increase of gold jewellery exports from India from 2003 to 2004: 68 %
(to 2 bn Euro a year till Mar 04) [HT May 04]
- share of US as destination for India's gold jewellery exports:
40 % (2004)
- India's annual import of scrap metal: 3.65 m metric tonnes (worth 580
million Euro) [BBC Oct 04]
 - number of containers filled with metal scrap arriving in India's ports:
500 containers per day [BBC Oct 04]
- amount of hazardous and potentially hazardous wastes entering India
illegally 1998-1999: 100,887 tonnes (acc to Greenpeace) [BBC Sep 2000]

India’s soaring ambition: 5 new cities by 2015

Navi Mumbai covers 345 sq km. In

comparison, the size of the Dholera city that
the Gujarat Industrial Development Board
plans to build with private participation will
be all of 360 sq km.

Dholera is just one of the five similar-sized

greenfield cities that India hopes to build in
the next few years. They are Manesar-Bawal
in Haryana, Indore-Mhow in Madhya
Pradesh, and Dighi

and Nasik-Igatpuri in Maharashtra -- all along

the Delhi-Mumbai Industrial Corridor. This
means the plan is to have five brand new cities, which are bigger than Navi Mumbai, in the next five years.And
the list is seeing new additions at a rapid pace. The Vijaynagar Area Development Authority in Karnataka has
roped in the Centre for Enviromental Planning and Technology as architects for developing a new city in
Karnataka.

"The area has the largest reserve for iron

ore in the country and the new city would
come up in a 570 sq km area, which has
been identified and earmarked," said Anil
Roy, Assistant Professor at CEPT.

The new city would have a capacity to

accommodate 5-10 million population, on
the basis of estimates.

The Karnataka government also recently

invited proposals to develop four cities of about 9,000 acres (around 35 sq km) each near Bangalore,
according to a developer who has evinced interest in the project.

"It is better to have newer cities than to expand," said Utpal Sharma, dean of planning & public policy
faculty at CEPT. Sharma is leading a team of architects in laying out a plan for the Hyderabad
Metropolitan Area, seen as an extension of the existing city. "An additional area of 450 sq km will be
added, scaling the overall size to 760 sq km with a new airport."

The Chhattisgarh government also recently came up with a proposal to develop a 'New Raipur' over
25 sq km.

Amitabh Kant, managing director and CEO of DMIC Development Corporation, said Dholera has an
area of about "560 sq km urbanisable area of which 360 sq km is developable".

"It is bigger than what has been attempted in China or Korea so far. The first phase of the project
would be completed by 2016. Dholera would attract two million population on completion," Kant
says.

GIDB already possesses over 50,000 hectares of land at Dholera. The cost estimate for infrastructure
is estimated to be about Rs 38,000 crore (Rs 380 billion) and will create housing facilities for 500,000
people over 30 years, according to estimates by UK-based Helcrow who are doing the master
planning for the city.

The plan for industrial cities hasn't come

a day too soon. According to a McKinsey
Global Institute 2010 report, 590 million
people will live in Indian cities by 2030,
almost twice the population of the US
today.

An investment of $1.2 trillion will be

required to meet the projected demand in these cities, and about 700-900 million sq metre of land
space needs to be built, or a new Chicago every year.

The study states that India will require 20-25 new cities in the next 30 years near the largest 20
metropolitans by providing adequate infrastructure.

But what could be a big bottleneck is funding. The success of these cities depend a great deal on
getting private sector investment and the central government facilitating soft loans from multilateral
agencies with a 10-year moratorium, at least.

Even the McKinsey study acknowledges that. Building new cities is sustainable only when at least
300 to 400 million jobs are created and each of this city hosts a population of around 1 million, a
landmark that usually requires strong anchor tenants and several years of incubation.

International experience shows that it takes 15-20 years to reach this level of population, according to
the McKinsey study.

A recent example of a big city coming up smoothly is the Hindustan Construction Company's Lavasa
city project in Maharashtra, billed as India's largest hill city.

Rajgopal Nogja, president of HCC

Real Estate, said: "We have invested
over Rs 4,000 crore (Rs 40 billion) in
Lavasa of our total investment of Rs 47,000 crore (Rs 470 billion). The area will draw an overall
investment of Rs 100,000 crore (Rs 1,000 billion). We are also interested in developing Dahej in
Gujarat as a greenfield city, besides developing one city in Himachal Pradesh and in Karnataka."

The Gujarat government came up with a Special Investment Region (SIR) Act in March 2009 for
setting up new cities in the state, driven by industrialisation.

About 12 such special investment regions have been identified and given to agencies for master
plan so far with two more in the offing. These include Sanand, Dholera, Changodar, Santalpur,
Hazira, Navlakhi, Simar, Pipavav, Dahej, Anjar, Okha, Aliabet, Savli and Halol.

"The minimum size for an SIR is 100 sq km," sources said.

Aliabet, which will house townships for the Japanese, has been identified as an entertainment
zone SIR to come up on about 100 sq km, said sources.

While Hitachi and Mitsubishi-led consortiums have been selected by DMICDC for laying out
plan for developing 'Smart Cities' in Dahej and Chagodar respectively, Toshiba and JGC Corp-
led consortiums will give shape to Smart Cities in the Maneswar-Bawal region of Haryana and
Shendra industrial region in Maharashtra.

The initial contours of the state government's massive plans to develop over a dozen new cities
are slowly emerging. After Dholera, Gujarat government has put its plans to develop Dahej as a
greenfield city on a fast track.

As many as half a dozen companies including construction and real estate majors like Mahindra
Lifespaces Developers(formerly known as Mahindra Gesco Developers), Unitech and Hindustan
Construction Company (HCC) have evinced interest to develop Dahej, said government sources
privy to the development.

Also in fray is Marg Construction, a Chennai based real estate and infrastructure company,
sources added.

"The minimum size for developing Dahej city is 100 sq kms. The maximum developable area is
about 350 sq kms," said sources close to the development. The estimated investment by a
developer would be about Rs 10,000 crore. The bidding process for the project is expected to be
over in three months time.

"Gujarat Industrial Development Corporation (GIDC) has recently invited expression of interest
from players with a seed capital of Rs 1,000 crore," sources said. The proposed area will have
about 75,000 to one lakh housing units.

Gujarat government came up with a Special Investment Region (SIR) Act in March 2009 for
setting up new cities in Gujarat, driven by rapid industrialisation. About 14 such special
investment regions have been identified and given to agencies for master plan so far with two
more in the offing. These include Sanand, Dholera, Changodar, Santalpur, Hazira, Navlakhi,
Simar, Pipavav, Dahej, Anjar, Okha, Aliabet, Savli and Halol.

"The minimum size for any SIR is 100 sq km," sources said

Rajgopal Nogja, President of HCC Real Estate, said "We are interested in developing Dahej in
Gujarat as a greenfield city, besides developing one city in Himachal Pradesh and in Karnataka."

Aliabet, which will house townships for the Japanese has been identified as an entertainment
zone SIR to come up in an area of about 100 sq km, said sources. Dahej has also among the four
Smart Cities planned on Delhi Mumbai Industrial Corridor.

It will be built on the lines of Kita Kyusyu and Yokohoma of Japan. They will be made using
smart technology, smart grids, smart water management and so on. There will be next generation
energy management systems with zero emission industrial parks.

A consortium led by Hitachi including Itochu, Tokyo Electric Power Company and Kitakyushu
City have been selected for laying out a plan for Dahej.

Following the enactment of the Gujarat Special Investment Region Act by the state government,
Dahej has been notified as a Petrochemicals and Petroleum Investment Region.

When fully functional, Dahej PCPIR - falling on the Delhi-Mumbai Industrial Corridor - is likely
to touch the export target of Rs 62,000 crore (Rs 620 billion). The area has a special economic
zone developed by GIDC in association with ONGC.

SOURCE:-

• Infrastructure (Economics) (Analysis)

Urbanization (Economic aspects)
• Indian Journal of Economics and Business
Publisher: Indian Journal of Economics and Business Audience: Academic
Format: Magazine/Journal Subject: Business; Economics
Indian Journal of Economics and Business
• Indian economy & employment statistics