Practice Question 11

Q) Does rapid urban development in India, positively affect poverty in rural regions? Critically examine.

Superb Hints:

Poverty-reducing impact of urbanization is a consequence of urban-rural economic linkages and it is not due to the re-location of the rural poor to urban areas.

  • economic linkage effects capture the impact of urbanization on the welfare of those who remain in rural areas through urban-rural linkages but,

  • re-location of the rural poor to urban areas brings variation in rural poverty is simply due to the change in residency from rural to urban areas of some of the rural poor.

Urbanization plays an important role in poverty alleviation in adjacent rural regions. There are several ways through which urban population growth affects poverty in surrounding areas:

1. Consumption linkages - Dependency of urban population for consumption purposes is increasing heavily over rural areas thus helping in reducing poverty.

2. Rural non-agricultural employment- Expanding urban areas causes diversification of economic activity away from farming in surrounding rural areas, which has a positive effect on income.

3. Higher wages -Urban development has caused labour migration from rural areas due to which wage rate of rural labour has been increased significantly, thus reducing poverty.

3. Urban-rural remittances –With increasing rural-urban migration urban to rural remittances are also increasing thus helping to reduce poverty.

4. Increase in rural land/labor ratio- Due to rural-urban migration and availability of non-farm employment rural land has become less burdened, thus reducing disguise unemployment.

However, positive effects of urban development in poverty alleviation in rural regions are limited. Urban development can also introduce poverty in rural areas through new channels. It brings pressure on natural resources of nearby rural areas thus contributing to new kinds of poverty. For e.g. lowering of water table increases un-remunerative labour for women who have to walk long distances to fetch water for domestic needs. This causes loss of paid labour. Loss of natural resources such as trees and increase in pollution can add cost to health care also. These are new holes in pocket of rural folks.

According to UN report urban population is expected to reach 40 percent of total population. Thus, there is need of investment in urban infrastructure. But it should not come by slashing investment for rural infrastructure development. Otherwise, it will make rural economy hostage of urban needs. Studies tell Agriculture’s contribution to poverty reduction is five times more than that of metropolitan centres. Schemes like AMRUT can bring direct impact on rural poverty that requires rigrous implementation.

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