Urbanization: Making Room for Migrant Workers

Abstract

Economic transformation involves a movement of workers out of agriculture and into industry and services. The latter are predominantly located in and around urban areas. Therefore, urbanization is integral to transformation and modernization. In India, the process of urbanization has been extremely slow. The high cost of living and a scarcity of low-cost rental housing have in turn impeded the faster movement of agricultural workers into industry and services. A key problem behind this situation is the high cost of urban land, a result of a very low floor space index, complex rules on the conversion of agricultural land on the periphery of cities, the difficulty of converting space from one use to another, and the large volume of unused land owned by sick firms or various government ministries; poor transportation networks add to the problem. The chapter spells out reforms to relax these constraints.