India may be far less urban than govt claim; World Bank study surprises with data on each state

By: |
February 26, 2020 12:24 PM

There are significant differences between the predicted urbanisation rates and official figures at the state level.

urban india, urbanisation, work bank, world bank report, how urban is india?The estimate of the urban population falls short of the official estimate by roughly 15 lakh people in each of the states of Odisha, Gujarat, and Rajasthan. (Bloomberg image)

India’s official urbanisation rate for 2011 is 31.2 percent, however, the latest study by World Bank suggests that India could be even less urbanised than official figures imply. The urbanization rate emerging from the new study for India’s is 29.9 percent. “There are also significant differences between our predicted urbanisation rates and official figures at the state level,” said the World Bank. The estimate of the urban population falls short of the official estimate by roughly 15 lakh people in each of the states of Odisha, Gujarat, and Rajasthan. The gap is even bigger in Madhya Pradesh, where it reaches 39 lakh people, and especially in Tamil Nadu, where it approaches 66 lakh people. 

In the study, the random forest method has been used because of its higher prediction accuracy. If the predicted likelihood of being urban was above 0.5, the place was classified as urban, otherwise, it was considered as rural. The random forest algorithm creates decision trees on data samples and then gets the prediction from each of them and finally selects the best solution by means of voting. It is a more accurate method as it is better than a single decision tree because it reduces the over-fitting by averaging the result.

Also Read: Another quarter with below 5% GDP growth, or will RBI, govt measures pay-off?

“While these gaps in the estimated urban population could reflect prediction error, there are grounds to believe that they result, at least in part, from prevailing institutional arrangements,” Work Bank study showed. In India, urban development is a subject under the purview of state governments and by default, all settlements are rural and they become urban only after the state government converts them, following a well-specified legal process, it added.

As a result, state governments exert large discretion in their choices, and the criteria to define a statutory town vary considerably across states. For example, in the southern coastal states, the threshold population of statutory towns varies from around 2,000 in Tamil Nadu to over 20,000 in Kerala and above 30,000 in Andhra Pradesh.

Do you know What is Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India, Expenditure Budget, Customs Duty? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Carpe diem: Chance for India to boost exports
2Surprise floods: Damage to crop to hit farm returns
3Capex: PMO asks 13 oil PSUs to double FY21 spend to Rs 2 lakh crore