India needs dynamic approach to define rural-urban areas: EAC-PM member

India needs a more dynamic approach to define rural-urban areas by using technological indicators like night-time light intensity, the Economic Advisory Council to the PM (EAC-PM) has said.

EAC-PM member Shamika Ravi in a working paper titled 'What is Urban/Rural India' also suggested that the government needs to establish 'trigger mechanisms' to automate the transition from rural to urban settlement after the prescribed threshold is reached.

The EAC-PM also suggested that the government needs to revisit the assumption of creating schemes based on the rural-urban divide, which is a poor proxy for scarcity.

"India needs a more dynamic approach to defining rural-urban areas, which includes technological indicators like night-time light intensity," Ravi said.

As of December 2017, 'rural' is defined in relationship with 'urban'. Any settlement that is not considered 'urban' is automatically considered 'rural'.

"Further, the government needs to establish "trigger mechanisms", which automate the transition from rural to urban settlement after the prescribed threshold is reached," she added.

Ravi noted that the issue of labelling settlements as 'urban' and 'rural' has important policy implications in India since the label determines the local governance structure (panchayat or urban local body) and the allocation of resources under government schemes.

"Policymakers often work on the faulty assumption that rural is a proxy for poor and accordingly spend greater resources on the provisioning of public goods in areas defined as rural," she opined.

Rural areas benefit from a multitude of schemes from the central and state governments under the tacit assumption that rural economies that do not have the proximity of skilled individuals and capital are inherently poorer and need support.

According to Ravi, India could use the Streetlight Differentiating Model but tweak it to India's requirement to determine the extent of urbanisation or other population definitions as prevalent in other countries.

"This model could be adjusted for an Indian context by incorporating energy levels and income levels per settlement to understand how electricity availability/income of a settlement influences, what counts as Areas Highly Impacted by Light," she suggested.

Ravi further recommended that India should adopt a dynamic approach to the concept of rural, which means ministries should utilise the census and other settlement-wide indicators to determine the definition of rural that best suits their particular programme's mandate.

"In the long-term, government programmes should be directed towards tackling scarcity whenever available data permits it," she opined.

The paper recommended that the Ministry of Housing and Urban Affairs create a 'trigger' point for the rural panchayat to start transitioning to a ULB.

"This trigger should be jointly enforced with a carrot from the MoUD and a stick from the MRD.

"These reforms would transform the nature of emerging cities in India," she suggested.