Urban Corridors to Boost Growth of Second-Tier Cities in India

Date: May 13, 2014

Urban Corridors to Boost Growth of Second-Tier Cities in India

As the world’s megacities are approaching physical limits of growth, large decentralised urban conurbations are emerging across the globe as drivers of urbanisation and backbones of economic growth. For example, in Japan, the Tokyo-Nagoya-Osaka urban corridor is home to some 60 million people and forms the backbone of the country’s economic activities. In the US, Boston-New York-Washington on the northeastern coast is a key agglomeration of 50 million people, with a disproportionately large share of economic output. In China, three such great megalopolises (Bohai Economic Rim, Pearl River Delta, Yangtze River Delta) account for 14% of the country’s population and 36% of GDP. In 2014, India has also recognised the potential of urban corridors and has launched specific initiatives to develop several of them to boost economic growth and the expansion of surrounding second-tier cities.

World's Major Urban CorridorsWorld's Major Urban Corridors
Source: Euromonitor International


Note: Urbanised territories are derived from 2002-2003 MODIS satellite data at 1 km resolution, Schneider, A., M. A. Friedl, D. K. McIver, and C. E. Woodcock (2003) Mapping urban areas by fusing multiple sources of coarse resolution remotely sensed data. Photogrammetric Engineering and Remote Sensing, volume 69, pages 1377-1386.

Experience so Far

The Indian government’s efforts are rightly targeted. These sorts of city clusters are the future of urban development. So far, it has not been feasible to build a functioning city with over 50 million people. Tokyo, the world’s largest and most modern metropolis, has expanded to 37 million but is unlikely to grow further. Many other of the world’s greatest cities of comparable size (such as JakartaManila and Delhi) lack the investment in infrastructure and face costly externalities of their overly large sizes, including pollution, traffic and density-related issues. The previously mentioned hub-and-spoke systems which emerged as urban corridors surrounding key metropolitan areas appear to be a natural response to oversized cities. Urban corridors bring together the productivity benefits of urban economies but maintain decentralised poles of activity.

India already has some experience of promoting such kinds of urban connections. For example, since 2007, the government has been working with Japanese investors to build the Delhi-Mumbai economic corridor. The Delhi-Mumbai corridor is estimated to attract 52% of FDI in India, and its total cost is expected to reach US$90 billion. However, as of 2014, it is still years away from completion.

The New Mumbai–Bangalore Proposal

In 2014, a feasibility study tender for yet another grand project was announced, this time aiming to connect Mumbai (the country’s financial centre and key seaport) to Bangalore (a major IT hub). The proposed economic corridor will focus on building rail infrastructure, a highway system, manufacturing facilities and one million new homes. Overall, investment of around US$30 billion is required, while 250,000 jobs should be created.

Certainly, there are already some doubts regarding the success of the project. Government-driven projects are notorious for their rocketing costs and lack of expected outcomes. Land prices along the proposed Mumbai-Bangalore corridor are likely to increase soon after the project is confirmed. The bureaucratic machinery of India, its states and municipalities are likely to demand numerous law changes and a long time to make them. Other worrying factors in India which pose potential threats include community opposition to land acquisition (for example, the Korean steel giant Posco cancelled a US$5.3 billion investment in 2013 for this reason).

Despite concerns about the ambitious project, it promises a brighter future for a number of second-tier cities situated along the proposed economic corridor. These include Tumkur, Chitradurga, Hubli, Dharwad, Kolhapur, Sangli, Satara, Karad and Pune. Second-tier cities are likely to benefit from emerging manufacturing hubs, improved infrastructure and connectivity. 

By Euromonitor International
Established in 1972, Euromonitor International is the world leader in strategy research for consumer markets. Comprehensive international coverage and leading edge innovation make our products an essential resource for companies locally and worldwide.

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