Cities as the Engine of Growth: Evidence from India
Publication: Journal of Urban Planning and Development
Volume 137, Issue 2
Abstract
This paper estimates their contributions to total gross state domestic product in an attempt to revisit the issue of cities as the engine of growth. Because direct evidence on this aspect is missing, this paper uses the proportion of urban workers to total workers and adjusts for the productivity differentials between rural and urban areas to arrive at the estimate of urban (city) domestic product. Findings suggest that a significant percentage of the value added, particularly in the nonagricultural sector, originates from the urban areas, with considerable variations across states. In general, states with a higher share of urban state domestic product have witnessed higher growth in per capita income and lower incidence of poverty. Estimates of cities’ contribution to the total urban domestic product have also been calculated for those that have been listed under special urban renewal mission. Rapid urbanization, economic growth, and poverty reduction are all related, and agglomeration economies play a major role in this context. Finally, this paper focuses on policy issues.
Get full access to this article
View all available purchase options and get full access to this article.
References
Alonso, W. (1970). “The economics of urban size.” Pap. Reg. Sci., 26(1), 66–83.
Becker, C., and Morrison, A. R. (1999). “Urbanisation in transforming economies.” Handbook of regional and urban economics: Applied urban economics, P. Cheshire and E. S. Mills, eds., Vol. 3, North-Holland, Amsterdam, Netherlands.
Brotchie, J. P., Newton, P., Hall P., and Nijkamp, P., eds. (1985). The future of urban form: the impact of new technology, Routledge, London.
Carlino, G. A. (1979). “Increasing returns to scale in metropolitan manufacturing.” J. Reg. Sci., 19(3), 363–373.
Carter, T. J. (1998). “Urban productivity, urban unemployment, and labour market policies.” Reg. Sci. Urban Econ., 28(3), 329–344.
Fujita, M., and Thisse, J.-F. (2003). “Does geographical agglomeration foster economic growth? And who gains and loses from it?” Jpn. Econ. Rev., 54(2), 121–145.
Futagami, K., and Ohkusa, Y. (2003). “The quality ladder and product variety: Larger economies may not grow faster.” Jpn. Econ. Rev., 54(2), 336–351.
Henderson, J. V. (1974). “Sizes and types of cities.” Am. Econ. Rev., 64(4), 640–656.
Henderson, J. V. (1986). “Efficiency of resource usage and city size.” J. Urban Econ., 19(1), 47–70.
Henderson, J. V. (1988). Urban development: Theory, fact and illusion, Oxford University Press, New York.
Hermansen, T. (1972). “Development poles and related theories: A synoptic review.” Growth centers in regional economic development, N. M. Hansen, ed., The Free Press, New York.
Himanshu. (2007). “Recent trends in poverty and inequality: Some preliminary results.” Economic and Political Weekly, Feb. 10, 497–508.
Hoch, I. (1972). “Income and city size.” Urban Stud., 9(3), 299–328.
Jones, C. (1995). “R&D based models of economic growth.” J. Polit. Econ., 103(4), 759–784.
Kim, S. (1989). “Labour specialization and the extent of the market.” J. Polit. Econ., 97(3), 692–705.
Kim, S. (1991). “Heterogeneity of labour markets and city size in an open spatial economy.” Reg. Sci. Urban Econ., 21(1), 109–206.
Krugman, P. (1991). “Increasing returns and economic geography.” J. Polit. Econ., 99(3), 483–499.
Kuchiki, A. (2005). “Theory of a flowchart approach to industrial cluster policy.” Discussion Paper Series No. 36, Institute of Developing Economies–JETRO, Chiba, Japan.
Levinson, D., and Chen, W. (2007). “Area-based models of new highway route growth.” J. Urban Plann. Dev., 133(4), 250–254.
Meyer, D. R. (1998). “World cities as financial centres.” Globalization and the world of large cities, F.-C. Lo and Y. M. Yeung, eds., United Nations University Press, Tokyo.
Mills, E. S. (1967). “An aggregate model of resource allocation in a metropolitan area.” Am. Econ. Rev., 57, 197–210.
Mills, E. S., and Becker, C. (1986). Studies in Indian urban development, Oxford University Press, New York.
Mills, E. S., and Hamilton, B. W. (1994). Urban economics, 5th Ed., Scott Foresmen, Glenview, IL.
Mills, E. S., and Mitra, A. (1997). Urban development and urban ills, Commonwealth Publishers, New Delhi.
Ministry of Statistics and Programme Implementation. (2006). “Net Domestic Product by Economic Activity in Rural and Urban Areas.” Government of India, New Delhi.
Ministry of Statistics and Programme Implementation. (2007). “Employment and unemployment situation in cities and towns in India, 2004–05, NSS 61st round.” Government of India, New Delhi.
Mitra, A. (1994). Urbanisation, slums, informal sector employment and poverty: An exploratory study, D. K. Publishers, Delhi.
Mitra, A. (1999). “Agglomeration economies as manifested in technical efficiency at the firm level.” J. Urban Econ., 45(3), 490–500.
Mohan, R. (1993). Industrial location policies and their implications for India, Paper No. 9, Ministry of Industry, Office of the Economic Adviser, Government of India, New Delhi.
Moomaw, R. L. (1983). “Is population scale a worthless surrogate for business agglomeration economies?” Reg. Sci. Urban Econ., 13(4), 525–545.
Montogomery, M. R., Stren, R., Cohen, B., and Reed, H. E., eds. (2004). Cities transformed: Demographic change and its implications in the developing world, Earthscan, London.
Nakamura, R. (1985). “Agglomeration economies in urban manufacturing industries: A case of Japanese cities.” J. Urban Econ., 17, 108–124.
Norman, J., MacLean, H. L., and Kennedy, C. A. (2006). “Comparing high and low residential density: Life-cycle analysis of energy use and greenhouse gas emissions.” J. Urban Plann. Dev., 132(1), 10–21.
Papola, T. S. (1981). Urban informal sector in a developing economy, Vikas, Ahmedabad, India.
Petrakos, G. C. (1992). “Urban concentration and agglomeration economies: Re-examining the relationship.” Urban Stud., 29(8), 1219–1230.
Rastogi, R. (2010). “Willingness to shift to walking or bicycling to access suburban rail: Case study of Mumbai, India.” J. Urban Plann. Dev., 136(1), 3–10.
Segal, D. (1976). “Are there returns to scale in city size?” Rev. Econ. Stat., 58(3), 339–350.
Sviekauskas, L. (1975). “The productivity of cities.” Q. J. Econ., 89(3), 393–413.
Zeiss, C., and Lefsrud, L. M. (1995). “Analytical framework for waste facility siting.” J. Urban Plann. Dev., 121(4), 115–145.
Information & Authors
Information
Published In
Journal of Urban Planning and Development
Volume 137 • Issue 2 • June 2011
Pages: 171 - 183
Copyright
© 2011 American Society of Civil Engineers.
History
Received: Apr 10, 2009
Accepted: Aug 24, 2010
Published online: May 16, 2011
Published in print: Jun 1, 2011
Authors
Metrics & Citations
Metrics
Citations
Download citation
If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download.