News: Tier-II cities make the cut in migration

(FE 16/05/2006) Mumbai - With rural-urban migration gaining momentum and 40% of the population projected to stay in urban areas by 2030, as against 29% in 2000, it's the tier-II cities which need urgent attention. The India Infrastructure Report 2006 by Infrastructure Development and Finance Company Ltd which focuses on urban infrastructure, says such cities as Nagpur, Surat, Vijaywada, to name a few, with half a million population and growing at a daunting pace, are the priorities.

Citing a study of National Council for Applied Economic Research (NCAER), the report says, “Though the tier-I cities remain the country’s richest, those in tier-II are emerging as the new growth centres. While the tier-I cities represent 6% of the population and account for 14% of India’s GDP, tier-II represents about 7% of the nation’s population and contribute about 13% to GDP.”

The report has noted that the companies engaged in the development of the IT/ITES sector, are also suffering from infrastructure bottlenecks. It has stressed on the need of developing tier-II and tier-III cities so that some of the pressure can be taken off from tier-I cities.

“A number of tier-II cities has the offer advantages in terms of cheaper real estate, access to appropriately skilled manpower and gradually improving telecom and physical infrastructure and coming into their own terms of drawing global and Indian IT majors. A NASSCOM-KPMG study has shown that tier-II cities, like Nagur, Jaipur, Pune offer more advantages to ITES companies. These cities have little time to improve their infrastructure to ensure that they continue to remain attractive to private sector investment in long term”, it said.

The negligence of the urban development authorities which was exposed during the deluge in Mumbai monsoons last year has also been highlighted in the report. Commenting on the issue, the report said, “The government and the authorities were caught unaware and chaos prevailed. It exposed the stark deficiencies in infrastructure and limitations of the city administration.”