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India’s Urban Awakening

Urbanization advances economic development, but it also poses major challenges, from managing congestion and pollution to ensuring that growth is inclusive and equitable. India has the tools it needs to overcome these challenges, and can do so if its leaders must use them wisely.

WASHINGTON, DC – When the United Kingdom became the first country in the world to undergo large-scale urbanization in the nineteenth and early twentieth centuries, the process transformed its economy and society. Today, India is facing a similar transformation, only it is happening at 100 time the pace. By 2030, India’s urban population will reach 600 million people, twice the size of America’s.

For India, rapid urbanization is particularly vital to enable the country to take full advantage of the demographic dividend afforded by its young population. With 12 million more people joining the country’s labor force every year, the potential of that dividend is huge. As the urbanization process continues, connectivity, proximity, and diversity will accelerate knowledge diffusion, spark further innovation, and enhance productivity and employment growth.

For all of its benefits, however, rapid urbanization also poses enormous challenges, from managing congestion and pollution to ensuring that growth is inclusive and equitable. As a latecomer to urbanization, India will benefit from technological innovations – including digital technologies, cleaner energy, innovative construction materials, and new modes of transport – that will enable it to leapfrog some of its more developed counterparts. But taking advantage of those technologies will require effective policies, including smart infrastructure investments and measures to make cities more competitive, particularly in modern industries.

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