Indian Urbanization and Economic Growth since 1960

Trends in urbanization in India and their relationship to economic growth since 1960 are analyzed. The authors use the technique of general equilibrium analysis to identify the interactions among cities and rural areas in India and between India and the rest of the world. Specifically they develop a model of the Indian experience since 1960 that estimates the economy as it was and allows for the production of different scenarios. The results indicate that although rapid urban population growth occurred during that decade there has been a decline in urban labor force growth rates since then. Indias relatively slow urban growth can be explained partly by unfavorable economic and demographic conditions but is primarily attributed "to structural and institutional arrangements that make city growth less responsive to favorable conditions than is true of the rest of the Third World." The authors suggest that the slowdown in the rate of urban growth will continue into the 1990s. (EXCERPT)