By Sreejita Talukdar, Content Writer, Homes

Development of Small Cities & Census Towns: Unlocking the Potential of India

India is a developing country which is going through various stages of infrastructural development. India is characterized by its green pollution-free villages, but in the last twenty five years, India showed a tremendous growth in the pace of urbanization.  Since 1950, after the foundation of planning commission and commencement of five year planning, India has witnessed a consistent rise in urbanization and infrastructural development. Between 2010-2018,a 2.4% growth rate of urbanization was observed, whereas, in 2022, the growth of urbanization was expected to be 35.9%, and by 2047 this is expected to increase to approximately 50.9%. This rapid urbanization was followed by the trajectory of economic development. According to the experts, enhanced use of digital technology for smart city planning for improving the quality of governance and public services has fostered this growth. It is estimated that half of the country will be urbanized in the coming years, and the urban population will contribute to 73% of the total population increase by 2036. 

We see urbanization as an opportunity and we are committed to making our cities world class urban spaces that further 'Ease of Living' - Narendra Modi, Prime Minister

Development of Small Cities

From the past development report of India, we get to know that, small towns have been playing a crucial role in rural sustainable development, by providing most public services for rural residents living in hinterland villages. They are emerging in the vicinity of large cities with low variation in distance and population size. In India small towns are the main destination for access to daily necessities, agricultural trades, non-farm employment, basic education and minor medical treatment for rural villagers. For the developed areas or metro cities, these small towns are a place of weekend gateway, where we can rejuvenate our senses amidst the nature.

Chikmagalur, Sirsi, Ooty are few famous small towns in Karnataka which were developed concentrating on tourism. Few colleges and universities are choosing small towns to establish their campus because there they can get ample amount of land-parcel in cheap price. Focusing on this, many shops and accommodating places are establishing creating plenty of employment opportunities. These cities are attractive to entrepreneurs due to their lower cost of living and operating business. These entrepreneurs are establishing their factories and warehouses, which is again an employment factor dragging aspiring candidates from nearby villages to come there.

Companies related to food businesses like dairy products, poultry farming, fishery farming, and more are constructing multiple warehouses and factories because of the proximity of the raw materials and cheap labor. The increased number of co-working spaces and incubators in smaller cities and towns are helping the entrepreneur to build a community of talented professionals. Renowned Bangalore based company UNIBIC which is famous for its tasty crispy cookies and biscuits have several factories and warehouses in small cities and transitional areas of rural Karnataka. These transitional areas are rapidly growing and in upcoming years it will convert into metro cities.

Government Initiatives

  1. Pradhan Mantri Awas Yojana: The idea of the scheme was derived from the Government’s commitment to provide ‘Housing for All’ by 2022 in the rural areas as well as urban areas for the poor. The implementation period of the PMAY(U) Urban scheme has been extended until 31st December 2024. The cost of unit assistance is shared between Central and State Governments in the ratio 60:40 in plain areas and 90:10 for North Eastern and hilly states. The high points of this project are subsidized interest rate, priority for special groups, eco-friendly construction, PAN-India coverage, early Credit-Linked Subsidy. This scheme is using most innovative technologies, best construction practices for all economic classes of the society in a subsidized rate. The scheme was initiated with a target of constructing 1.2 crore homes, and 60 lakhs of homes have been completed so far.
  2. Integrated Development of Small & Medium Towns: This is a centrally sponsored scheme aiming at improving urban infrastructure in towns and cities in a planned manner. The objectives of the scheme are to improve infrastructural facilities and help create durable public assets and quality oriented services in cities & towns to enhance public-private-partnership in infrastructural development and promote planned integrated development of towns and cities. But unfortunately this scheme was not so successful.  Later this was combined Urban Infrastructure Development Scheme for Small and Medium Towns Scheme (UIDSSMT) which was Mission launched on 5th March, 2012. In 2015, the scheme was subsumed in to Atal Mission for Rejuvenation & Urban Transformation (AMRUT) which was a sub mission of Jawaharlal Nehru National Urban Renewal Mission (JNNURM).
  3. Pradhan Mantri Gram Sadak Yojana: The Pradhan Mantri Gram Sadak Yojana (PMGSY) was launched by the Govt. of India to provide connectivity to unconnected habitations as part of a poverty reduction strategy. Govt. of India is endeavoring to set high and uniform technical and management standards and facilitating policy development and planning at state level in order to ensure sustainable management of the rural roads network. Transport and connectivity are the key component of rural development and urbanization. This scheme has two phases. In PMGSY Phase-I, 1,35,436 habitations were targeted for providing road connectivity and 3.68 lakh km. PMGSY phase-II the target was to consolidate 1,25,000 Km road length in the States by 2025. The roads which were developed in Phase-I were upgraded in Pahse-II. Through this scheme Govt dragged attention of the international financial institutions to construct basic rural infrastructure. This scheme is beneficial for smaller cities or transitional area by facilitating good healthcare, increased agricultural health. During the launch it was declared that the project will be funded by both the union government (60%) and the states (40%) and in hilly areas union and state government ratio is 90:10.
  4. PM Gati Shakti: This is a platform which connects 16 ministries including railways and roadways together for integrated planning and coordinated implementation of infrastructure connectivity projects. Through these campaign industrial corridors, economic zones will be connected through synchronized, holistic, integrated, and comprehensive planning based on knowledge, technology and innovation. The required data, information and maps will be circulated to every zones through govt’s cloud network called ‘Meghraj’. This scheme will foster infrastructural and economic development through enhanced prioritization and optimal usage of resources.

    5.Vikas Bharat SankalpYatra: It is a nationwide campaign to raise awareness through extended activities to achieve saturation of government scheme. This was flagged off by Prime Minister Narendra Modi on November 15th , 2023. Government has made remarkable strides in reaching remote corners of the nation, creating awareness about central government welfare schemes, and achieving the ambitious goal of 100% saturation of flagship programs. This scheme brings forth the vulnerable people who have not benefited earlier in the existing schemes. This scheme is combined with Ayushman project health insurance worth Rs. 5 lakhs, free dialysis for the poor and low-cost medicines at Jan Aushadhi Kendras in villages and small towns. This scheme got huge response and the first day over 100,000 participated across 250+ gram panchayats.

During the launch PM Modi quoted, “Modi's guarantee begins when expectations from others cease.”

  1. Shyama Prasad Mukherji National Rurban Mission: The National Rurban Mission (NRuM) follows the vision of "Development of a cluster of villages that preserve and nurture the essence of rural community life with focus on equity and inclusiveness without compromising with the facilities perceived to be essentially urban in nature, thus creating a cluster of ‘Rurban Villages’. This scheme aims to uplift local economic development, enhance basic services, and create well planned Rurban clusters. Out of total 75,999 projected works under the mission, a total of 39,554 works have been completed. Mostly it helped in the transformation of the small town from rural areas by improving infrastructure.

Technologies in Development of Small Cities

Technology is working as a pivotal energy in the urban development and growth of the infrastructure industry. In today’s advanced era construction companies are relying on telemetry and Internet of Things (IoT) technology which enable fleet managers to be in command and handle the working load of a machine to optimize assignments even better. IoT helps different components of infrastructure providing a platform to make real time decision. Also it connects each elements of the city like street-light, waste bin, parking space, bus, road, and so on.

Artificial Intelligence and Machine Learning helps in increasing safety, improving workflows, and getting jobs done faster and better. With 3D printing, 

construction companies can create models of their projects before they even break ground. Building Information Material (BIM) is another popular and widely used technology. In today’s world, smart and sustainable construction is taking the center stage by using green technologies.

Growth Statistics

India’s urbanization rate was 1.34% in 2021. According to World Bank Data, India urban population for 2022 was 508,368,361 with a 2.05% increase from 2021. India plans to spend US$ 1.4 trillion on infrastructure through ‘National Infrastructure Pipeline’ in the next five years. The number of towns and transitional areas has grown thrice in 2011(3,894) census compared to 2001(1,362). The Indian Economic Survey 2017-18 estimated that the country will require $4.5 trillion infrastructure investment by 2040.


There is plethora of studies which revealed that, the emergence of these small and medium towns are the real driving force behind infrastructural development. It is surprising to notice that most of these urban peripheries are not only towns in the vicinity of large metropolitan cities but also rural villages which have grown to acquire characteristics of urban areas.

The emergence of market towns is an important feature of these census towns and small towns. Nonetheless, this development is important for country’s growth but the administration should keep a check on population to avoid a population explosion. It is also essential to closely monitor the rate of urbanization as it will aid in the process of building sustainable pathways to socio-economic development in the country. If the pace of progress continues with planned and controlled way, by 2047 India will surely achieve a higher rate of social progress.