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    Urban Economics

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    Saurabh Suman
    Urban centers are important engines of economic growth and contribute significantly to national GDP. As economies develop and industrialize, urbanization increases along with employment opportunities in cities. While the formal sector provides high salaries, most urban labor is engaged in the informal sector. Various policy initiatives aim to promote self-employment and small enterprises to generate jobs and support the livelihoods of informal workers. Public-private partnerships and skills training programs further aim to stimulate employment in urban areas.

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    Urban Economics

    Uploaded by

    Saurabh Suman
    414 views22 pages
    Urban centers are important engines of economic growth and contribute significantly to national GDP. As economies develop and industrialize, urbanization increases along with employment opportunities in cities. While the formal sector provides high salaries, most urban labor is engaged in the informal sector. Various policy initiatives aim to promote self-employment and small enterprises to generate jobs and support the livelihoods of informal workers. Public-private partnerships and skills training programs further aim to stimulate employment in urban areas.

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    Urban centers are important engines of economic growth and contribute significantly to national GDP. As economies develop and industrialize, urbanization increases along with employment opportunities in cities. While the formal sector provides high salaries, most urban labor is engaged in the informal sector. Various policy initiatives aim to promote self-employment and small enterprises to generate jobs and support the livelihoods of informal workers. Public-private partnerships and skills training programs further aim to stimulate employment in urban areas.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    414 views22 pages

    Urban Economics

    Uploaded by

    Saurabh Suman
    Urban centers are important engines of economic growth and contribute significantly to national GDP. As economies develop and industrialize, urbanization increases along with employment opportunities in cities. While the formal sector provides high salaries, most urban labor is engaged in the informal sector. Various policy initiatives aim to promote self-employment and small enterprises to generate jobs and support the livelihoods of informal workers. Public-private partnerships and skills training programs further aim to stimulate employment in urban areas.

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    of 22

    URBAN ECONOMY

    IMPORTANCE OF URBAN CENTRES

     Cities are the engines of economic growth.


     Provide specialized services and enhances the
    quality of life.
     Urbanization leads social-economic changes,
    economic development and make the process
    sustainable, efficient and equitable.
     Contribution to GDP(from urban sector) increased
    from 29% in 1950-51 to 60 % in2001.
    CONTRIBUTION TO NATIONAL INCOME

    National Income (Net National Product)

    1800
    1590.3
    1600
    1434.4
    1400
    1224.8
    1200 1094
    Rs 000' crore

    1011.2
    941.9 949
    1000 890.7
    852.1
    806.6 787.8
    800 734.3
    685.9
    685.9

    600

    400

    200

    0
    1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00
    Current Prices 1993-94
    ECONOMIC DEVELOPMENT AND
    URBANISATION
    • Positive relationship between urbanization and
    economic development .
    •Lead by industrialization, commercialization
    • Increase in productivity, employment generation

    and improvement in infrastructure facilities.


    •Employment rate has increased in private sector post
    reform period(5% increase).
    •Negative in public sectors / less than 1%.
    Growth Rates of Employment in Organised
    Sectors

    6
    5.5
    5
    4.5
    4
    Fig in %

    3.5
    3
    2.5
    2
    1.5
    1
    0.5

    1991 1992 1993 1994 1995 1996 1997 1998 1999


    Public Sector Private Sector Total Organised
    Employment by Industry
    Public Private
    Sector(%) Sector
    (%)
    1990 1995 1999 1990 1999 1995
    Agriculture ,Hunting etc. 5.49 5.39 5.15 8.76 8.94 8.71
    Mining and Quarrying 9.66 10.16 9.26 0.99 1.03 0.87
    Manufacturing 18.7 17.56 15.69 44.57 47.06 51.78
    Electricity ,Gas & Water 8.97 9.35 9.62 0.04 0.04 0.41
    Construction 11.34 11.64 11.07 68 0.53 0.71
    Whole Sale & Retail Trade 1.5 1.62 1.63 2.19 3.08 3.23
    Transport ,Storage & 30.23 31.06 30.84 0.52 0.58 0.69
    Communication
    Finance ,Insurance 11.54 12.83 12.95 2.39 2.93 3.58
    ,Income ,Real Estate,etc.

    Communication ,Social & Personal Services


    90.19 95.04 94.94 14.6 16.03 17.00
    TOTAL 187.62 194.66 194.15 75.82 80.59 86.98

    Source:Ministry of labour Economic Survey 2000-01,GOI.


    Formal and Informal Sector Economy

    IN FO R M AL S E C T O R E M P LO Y M E N T IN C IT IE S

    70 65.5
    61.4
    60 53.8
    49.5 46.5
    50
    Fig in Percentage

    40
    28.5
    30
    20
    10
    0

    lhi

    re
    ta
    i

    na
    ba

    De
    ba
    lka

    lo
    en
    m

    na
    da
    Ko
    Mu

    Ch

    Ba
    me
    Ah

    Source:The State of the World’s Cities 2001,UNCHS (Habitat)


    Formal and Informal Sector Economy

    • Formal sector economy pays high salaries but


    sustains smaller proportion of urban labour force.
    • Informal sector has higher share of labour force.
    • Informal sectors mostly found in developing
    countries. Informal sector is reliable even in
    stagnant stage of economy.
    • Informal sector provides new employment
    opportunities .
    • Self help employment initiatives
    ECONOMIC DEVELOPMENT AND EMPLOYMENT
    Share of Informal Sector to Total Workforce
    City Men (%) Women (%) Total (%)

    1993 1998 1993 1998 1993 1998


    Bangalore 22.5 25 80 75 32.2 34.2
    Chennai - - - - 60.6 64.8

    Guwahati 50 55 60 65 53 58
    Indore 60.4 69.1 74 86.9 63.7 72.7
    Jaipur - - - - - -

    Ludhiana 56.6 58.3 62.5 55. 9 59 58


    Mumbai 68.3 70.8 61.2 67.1 67.5 70.3
    Mysore - - - - 31.1 34

    Vijaywada 60 64.6 82 75.8 65.2 66

    Patna - - - - - -
    • The above data indicates informal sector in the city
    workforce has increased ,except Ludhiana which
    shows marginal decline.
    • Female employment ranges from 60% to 82%in 1993
    & 56 % to 87% in 1998
    • Employment opportuinities for males is also increased
    in all towns from 25% to 65%.
    • Need to accelerate public support schemes to
    promote informal sector activities to enhance
    productivity.
    • Provision for access to credit ,raw materials, markets,
    insurances and safetynets.
    Policy Initiatives
    Policy Framework & Programme Initiatives
    Self Help Groups
    • Main Focus on decentralised,participatory and
    demand driven approach.
    • Based upon 3-tier system started with 20 families’
    Neighbourhood Groups (NHG), followed by 200
    families’ Neighbourhood Committee (NHC) and
    culminating with 2000 families to Community
    development Society(CDS).
    • Mainly represented by poor women.
    • Encouraging local economic development by
    supporting establishment of saving and credit
    groups (Sewa Bank).
    Policy Framework & Programme Initiatives
    Promoting Home Based Economic Activities:
    • Sustainable and Cost effective for small and micro
    enterprises in urban and rural areas.

    Development of Small and Micro Enterprises:


    • Direct intervention to create employment opportunities.
    (SJSRY ,SGSY,NRY,UBSP)
    • Focus on promoting on self employment through micro
    enterprises development.
    • Women get priority of access.
    • Cash subsidy is minor component and credit facility is
    offered through nationalized bank.
    Public Private Partnerships To Stimulate
    Employment Opportunities
    • The need for involving people in development
    process is required for proper development.
    • Solid Waste management in urban area is good
    example in this field which includes contracted
    NGO’s and Community Based Organization
    (Rajkot,Bangalore).
    • Training and IEC (Information ,Education and
    Communication) for human resource development
    for educating and mobilizing the beneficiary groups.
    • Skilled based training for repairs and maintenance,
    groups of plumbing and sanitation, consumer
    durables ,credit groups.
    PER CAPIT A CIT Y IN CITIES

    40000
    35000
    30000
    Fig in No.

    25000
    20000
    15000
    10000
    5000
    0
    JA e

    P
    a
    UR
    gu ai

    ti

    M a
    ch e

    e
    M i

    a
    ba
    r

    tn
    ha

    n
    lor

    or

    N
    ad
    da
    n

    ia

    Pa

    G
    en

    IP

    um

    ys
    wa
    o

    yw
    In

    dh
    ng

    Lu

    ja
    Ba

    Vi
    1993 1998

    Source: India :Report on urban Indicators:GOI 2001


    Ministry of Urban Development and Poverty Alleviation
    Productivity and Partnerships
    • Aiming at reduction of urban poverty
    • Convergence of resources from stakeholder in urban
    development .
    • Per capita product among all town has shown increased
    during 1993-1998.
    • Per capita City Product of all cities is higher than
    GNP(All India).
    • Chennai is highest followed by Mumbai and Bangalore.
    • Gross National Product is almost double from
    Rs 7902 to Rs15019 within 5 year.
    Productivity and Partnerships
    • Percentage of unemployment has reduced.
    • Decline in female employment, needs priority.
    • Under DWACUA (Development of Women and
    Children in Urban Areas) women’s group have
    been organized for thrift and credit to generate
    income and employment opportunities .
    Emergence of Transport Corridors
    • Mains tools in accelerating the process of
    urbanization and industrialization.
    • Preferred location based on requirement
    of markets mainly focus on peripheral
    areas of cities
    • These corridors also attract other
    economic activities.
    • Development of industrial corridors,
    industrial estates,SEZ’S.
    Poverty
    • Urban poverty has declined to 21% (NSSO ’99-
    2000) .
    Poverty in India

    60
    50
    40
    Fig in %

    30
    20
    10
    0
    1973-74 197-78 1983 1987-89 1993-94 1999-2000

    India Rural Urban

    Source: Planning Commission ,Economic Survey,2000-01,GOI


    Employment Generation-
    Construction Sector
    • Ranks 4th among 14 sectors in terms of
    backward linkages.
    • 3rd - Total linkage with other sectors of
    economy.
    • High income multiplier 1:5.
    • Huge employment generation potential(5th
    employment multiplier).
    Private Sector Participation

    • Haryana joint development model .


    • West Bengal Housing Board- Ambuja’s
    Model.
    • Shelter delivery :relatively small .
    THANK YOU

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