India’s urban future is often narrated through the spectacle of megacities. Yet, beneath this dominant vocabulary, a quieter and far more consequential transformation is unfolding. Of nearly 9,000 census and statutory towns in India, barely 500 qualify as large cities. The overwhelming majority are small towns with populations below 1,00,000. Their rapid proliferation is not an anomaly; it is a structural outcome of India’s capitalist development—and of its current crisis.
How India’s urban growth shifted away from megacities
From the 1970s through the 1990s, capital accumulation in India was organised through metropolisation. Large cities such as Delhi, Mumbai, Chennai, Kolkata, and later Bengaluru and Hyderabad became the primary sites of industrial production, state investment, infrastructure expansion, and labour absorption. These cities functioned as spatial fixes for capitalism—absorbing surplus labour, concentrating consumption, and creating conditions for sustained accumulation.
Over time, however, these metros encountered the classic problem of over-accumulation. Land prices detached from productive use, infrastructure systems became overstretched, and living costs rose beyond the reach of working populations. As urban land and labour became expensive and politically visible, capital began seeking new spaces.
Why small towns are emerging as new economic nodes
It is in this context that small towns have emerged as India’s new urban frontier. Across regions, towns like Sattenapalle in Andhra Pradesh, Dhamtari in Chhattisgarh, Barabanki in Uttar Pradesh, Hassan in Karnataka, Bongaigaon in Assam, and Una in Himachal Pradesh are being reshaped into logistics nodes, agro-processing hubs, warehouse towns, construction economies, service centres, and consumption markets.
These towns absorb migrant workers pushed out of metros and rural youth with shrinking agrarian opportunities. They are not peripheral to the urban process; they are deeply embedded within it. What is occurring is not the spread of cities outward, but the internal reorganisation of urbanisation itself.
Urbanisation under conditions of capitalist stress
Small towns are urbanising under conditions that are favourable to capital but precarious for labour. Cheaper land, pliable workforces, weaker regulatory oversight, and limited political scrutiny make these towns attractive accumulation spaces.
This process offers no inherent emancipatory promise. What is unfolding is not inclusive growth but the urbanisation of rural poverty. Informal labour dominates—construction workers without contracts, women engaged in home-based piecework, and young workers locked into platform economies with no security or upward mobility.
New social hierarchies in small-town India
In towns such as Shahdol in Madhya Pradesh or Raichur in Karnataka, new hierarchies are rapidly hardening. Real estate brokers, local contractors, micro-financiers, and political intermediaries increasingly control access to land, housing, and employment. These actors extract rents by mediating between capital and labour, often in the absence of accountability.
As a result, inequality in small towns crystallises early—well before basic services, housing systems, or labour protections are firmly in place.
Why urban policy remains blind to small towns
Policy failure becomes most visible here. India’s flagship urban missions remain deeply metro-centric. Even in its expanded form, AMRUT effectively excludes most small towns from meaningful infrastructure investment. Water supply and sewerage systems are designed with large cities in mind, leaving smaller towns dependent on fragmented schemes and temporary fixes.
The consequences are predictable. Tanker economies flourish, groundwater is mined indiscriminately, and ecological stress intensifies. Instead of planned urban infrastructure, informal and extractive systems fill the gap.
Governance as the weakest link
Governance capacity in small towns remains severely constrained. Municipalities are underfunded, understaffed, and institutionally weak. Planning is frequently outsourced to consultants unfamiliar with local contexts, while citizen participation is reduced to procedural formalities rather than substantive engagement.
Without empowered local governments, towns struggle to integrate land use, livelihoods, transport, and environmental concerns into a coherent urban vision.
Reimagining the future of small-town urbanisation
The first requirement is political recognition. Small towns must be acknowledged as the primary frontier of India’s urban future, not as residual spaces awaiting metropolitan transformation.
Second, planning must be rethought. Town-level plans should integrate housing, livelihoods, mobility, and ecology instead of replicating metropolitan templates ill-suited to smaller settlements.
Third, municipalities need genuine empowerment—through predictable finances, transparent budgeting, and institutional space for workers’ collectives, cooperatives, and environmental actors.
Finally, capital itself must be disciplined. Platform economies and digital infrastructures require regulation to ensure labour rights, local value retention, and accountability over data and algorithms.
What to note for Prelims?
- Scale and definition of small towns in India
- Limits of metro-centric urban development models
- Coverage gaps in urban schemes like AMRUT
- Links between small-town growth, informality, and groundwater stress
What to note for Mains?
- Small towns as products of capitalist restructuring
- Urbanisation of poverty versus inclusive urban growth
- Governance and planning challenges beyond metros
- Need for decentralised, labour-sensitive, and ecologically grounded urban policy
