History of Urbanization and Effects of Industrial Revolution
Urbanization refers to a process in which an increasing proportion of an entire population lives in cities and the suburbs of cities. Historically, it has been closely connected with industrialization. When more and more inanimate sources of energy were used to enhance human productivity (industrialization), surpluses increased in both agriculture and industry. Larger and larger proportions of a population could live in cities. Economic forces were such that cities became the ideal places to locate factories and their workers. The increase in the proportion of the population residing in towns, brought about by migration of rural populations into towns and cities, and/or the higher urban levels of natural increase resulting from the greater proportion of people of childbearing age in cities (this, in turn, reflects patterns of migration). Urbanization indicates a change of employment structure from agriculture and cottage industries to mass production and service industries. This backs up the view that urbanization results from, rather than causes, social change. This is most notable in the development of capitalism and its attendant industrialization. It is said that the development of the landless labourer and the concentration of wealth into a few hands encourages urbanization. Others argue that urbanization is the inevitable result of economic growth, with the rise of specialized craftsmen, merchants, and administrators. A further view stresses the importance of agglomeration economies; cities offer markets, labour, and capital with a well-developed infrastructure, all of which increase their comparative advantage. In addition, Clark observes that the effects of globalization ‗compound, rather than replace, local processes of urban development. They introduce reasons for urban growth and urbanisation which add to the traditional attractions of cities as central places‘. Urbanization is a relatively recent process in the Third World where it is even more rapid than population growth and where the largest agglomerations are growing most rapidly. The negative effects of urbanization include the loss of agricultural land coupled with problems of urban food supply, the destruction of habitats, and urban diseconomies. The Urbanization of the World & Origin of Cities: The City is a relatively recent form of social organization.  Homo sapiens, the present human form has existed on earth for about 200,000 years, but cities have existed for less than 10,000 years.  Jericho in about 7000 B.C. grew from village to a "city" of about 3,000  3,500-4,000 B.C. first large cities (population of about 25,000) were established in Mesopotamia. A "city" refers to a place of relatively dense settlement -- dense enough so that city residents can not grow their own food. A city population, therefore, is always dependent upon its "hinterlands" to provide it with food. Not until agriculture developed could hinterlands provide food for their own populations and enough of a surplus to feed a city population. And in agricultural societies the surplus was so small that only a tiny proportion of an entire population

could live in cities. Up until very recently -- about 200 years ago -- that proportion was limited to about 5% of an entire population. So cities existed, but there was no urbanization. In the United States, about 5% of the population lived in cities in 1800, but about 50% of the population lived in cities by 1920. Throughout the 19th century, the US was urbanizing. The same was true for most European societies during the 19th century. Urbanization or the concentration of people in dense settlements is a worldwide phenomenon. In the 1800 only 2% of the earth‘s inhabitants lived in cities of 20,000 or more, now the proportion is over one-third. Intense urbanization is of relatively recent origin, beginning only after the Industrial Revolution. Before 1850 no country could be described as predominantly, urban and by 1900 only Great Britain could be referred to as such. Since then all the industrial powers have achieved this status and many of the developing nations are moving steadily in this direction. The most spectacular manifestations of urban growth are seen in the large human settlements scattered across the globe. A century ago there were only five urban areas with more than a million residents, today the number is approximately 150. Behind this phenomenal expansion is the ―population explosion‖ that the world has experienced during the current century. From 1900 to the end of the 1970s, the number of global inhabitants almost tripled to an estimated total of 4.4 billion. During this period the fastest growth shifted from the economically advanced countries of Europe and North America to the developing nations of Africa, Asia, and Latin America where three-fourths of the earths populace now lives. Only recently, for the first in history, has the world rate of increase shown a decline, dropping from a peak of 2.0% in 1966 ti 1.9% in 1976. The principle reason for the slowdown is the declining birthrate, first evidenced in the industrially mature regions and now in the developing countries.

Measurement and process
The measurement of urbanization: any measure of urbanization based upon census data is liable to marked error dependent on the under- or over bounded characteristics. To avoid this can be made in two ways. 1. The use of detailed rules for the definition of areas. According to the census the urbanized areas were based on enumeration districts which were usually no larger than one square mile and had no more than fifteen dwellings. The urbanized area then consisted of a central city which had a population of 50,000 together with a) Incorporated places with 2,500 inhabitants or more. b) Incorporated places with less than 2,500 inhabitants, provided that each had a closely settled area of 100 dwellings or more. c) Enumeration districts in unicorporated territory with a population density of 1,000 inhabitants or more per square mile (land devoted to such purposes as railway goodsyards, cemeteries, etc., being excluded). d) Enumeration districts with less than 1000 persons per square mile if they: i. Eliminate enclaves; ii. Close indentations‘ in the urbanized area of one mile or less across the open end; iii. Link outlying enumeration districts of qualifying density that were no more than one and a half miles from the main urbanized areas.


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2. The use of population densities: method which can be used in comparative studies and is based on population densities alone. Comparisons can only be made when the densities involved are similar, delineation of areas, using the smallest administrative unit, where minimum densities can be equated and identification of smallest units can be done and population densities can be calculated. Then work outward from the large city until points are reached where the densities fall below a given figure, say 100 per square km. Although a degree of generalization is involved, this process allows a line to be drawn around the city so that all areas with a density which is over the given figure are included. A series of rings of different density values can be identified and used in this way for comparative purposes. This overlaps with the formal definitions in relying on population density as a criterion and although interesting is no solution to the problem.

The process of urbanization
It is essential to define and understand the nature of this process as a preliminary to any further investigation. Lampard says that there are ‗three concepts of urbanization which have currency in the social sciences: the behavioral, the structural and the demographic. The first of these is concerned with the experience of individuals over time and with patterns of behavior; the second is related to the activities of the whole population and is primarily related to changes in economic structure; the third is the demographic concept where the process is seen primarily as one of population concentration. All three of these throw a different light on the process and each one presents particular problems. A brief review will give some insight into the urbanization process. The first of the three is perhaps the most well known and is usually related to Louis Wirths paper ‗Urbanism as a way of life‘. Where he rejects simple measurements of size, density and occupational structure or administrative status as denoting anything fundamental, Wirth formulated a theory of urbanism based on existing knowledge of social groups. The size of the aggregated population will affect relations between members, increasing the process of differentiation which ultimately leads to segregation. ‗The bonds of kinship, of neighbourliness, and the sentiments arising out of living together for generations under a common folk tradition are likely to be absent, or at best, relatively weak in an aggregate, the members of which have such diverse origins and backgrounds. Under such circumstances competition and formal control mechanisms furnish the substitutes for the bonds of solidarity that are relied upon to hold a folk society together. Urban dwellers meet in segmented roles and face to face relations are impersonal and superficial. In consequence of the superficiality, the anonymity and transitory character of urban social relations the individual becomes alienated from his folk or rural background; a sense of belonging to an integrated community is no longer held and leads to the state of ‗anomie‘, of being lost in ‗the lonely crowd‘. Density also adds to diversification and gives rise to characteristic urban contrasts of wealth and poverty. In addition ‗the close living together and working together of individuals who have non sentimental and emotional ties fosters a spirit of competition, aggrandizement and mutual exploitation. The clock and the traffic signal are symbolic of the basis of our social order in the urban world. But diversification means heterogeneity and this breaks down caste boundaries and gives the individual a fluctuating status determined by his own ability and effort rather than by his birth. A social role is not given

to the urban dweller by the social order into which he is born; rather, it is achieved and during this process a series of different roles will emerge, the result of his relations with fellow workers, with managers, with officials. This can lead to a state role confusion where the various parts to be played will conflict. The consequences of the above rural- urban contrasts have been described as a ‗rural-urban dichotomy‘. The second interpretation of urbanization is economic and relates ti ‗the movement of people out of agricultural communities into other and generally larger non – agricultural communities. This conception gives primary recognition to the differential ordering of occupations within a given territorial space‘. The crux of this approach is a direct correlation of economic develop0ment with urbanization and it usually couched in the form of the identification of phases of economic development each of which is associated with a degree of urbanization. Urbanization is seen therefore as a product of increasing economic specialization and advancing technology. The only way it is possible to advance from a subsistence basis is by specialization of economic activities. The linkages between specialism necessitate the accumulation of people and this is the process of urbanization. The third interpretation of the urbanization process is termed as demographic in the sense that it postulates that urbanization is a process of population concentration. Urbanization is seen as the organizational component of a populations achieved capacity for adaptation. It is a way of ordering a population to attain a certain level of subsistence and security in a given environment. In this a given factor is the level of technology which is itself a part of social organization so that there are four variables, population, environment, technology and social organization by which the process of urbanization is said to explained. Three of these ideas bear relationship to those put forward by

Reissman: Population= Urban growth Technology= Industrialization Social organization= Emergence of middle class

Urbanization or Urban Drift is the physical growth of urban areas as a result of global
change. Urbanization is also defined by the United Nations as movement of people from rural to urban areas with population growth equating to urban migration. The United Nations projected that half of the world's population would live in urban areas at the end of 2008. Urbanization is closely linked to modernization, industrialization, and the sociological process of rationalization.


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Movement As more and more people leave villages and farms to live in cities, urban growth results. The rapid growth of cities like Chicago in the late 19th century and Mumbai a century later can be attributed largely to rural-urban migration. This kind of growth is especially commonplace in developing countries. The rapid urbanization of the world‘s population over the twentieth century is described in the 2005 Revision of the UN World Urbanization Prospects report. The global proportion of urban population rose dramatically from 13% (220 million) in 1900, to 29% (732 million) in 1950, to 49% (3.2 billion) in 2005. The same report projected that the figure is likely to rise to 60% (4.9 billion) by 2030. However, French economist Philippe Bocquier, writing in THE FUTURIST magazine, has calculated that "the proportion of the world population living in cities and towns in the year 2030 would be roughly 50%, substantially less than the 60% forecast by the United Nations (UN), because the messiness of rapid urbanization is unsustainable. Both Bocquier and the UN see more people flocking to cities, but Bocquier sees many of them likely to leave upon discovering that there‘s no work for them and no place to live." According to the UN State of the World Population 2007 report, sometime in the middle of 2007, the majority of people worldwide will be living in towns or cities, for the first time in history; this is referred to as the arrival of the "Urban Millennium" or the 'tipping point'. In regard to future trends, it is estimated 93% of urban growth will occur in developing nations, with 80% of urban growth occurring in Asia and Africa. Urbanization rates vary between countries. The United States and United Kingdom have a far higher urbanization level than China, India, Swaziland or Niger, but a far slower annual urbanization rate, since much less of the population is living in a rural area.  Urbanization in the United States never reached the Rocky Mountains in locations such as Jackson Hole, Wyoming; Telluride, Colorado; Taos, New Mexico; Douglas County, Colorado and Aspen, Colorado. The state of Vermont has also been affected, as has the coast of Florida, the Birmingham-Jefferson County, AL area, the Pacific Northwest and the barrier islands of North Carolina.  In the United Kingdom, two major examples of new urbanization can be seen in Swindon, Wiltshire and Milton Keynes, Buckinghamshire[9]. These two towns show some of the quickest growth rates in Europe. Causes Urbanization occurs naturally from individual and corporate efforts to reduce time and expense in commuting and transportation while improving opportunities for jobs, education, housing, and transportation. Living in cities permits individuals and families to take advantage of the opportunities of proximity, diversity, and marketplace competition. People move into cities to seek economic opportunities. A major contributing factor is known as "rural flight". In rural areas, often on small family farms, it is difficult to improve one's standard of living beyond basic sustenance. Farm living is dependent on unpredictable environmental conditions, and in times of drought, flood or pestilence, survival becomes extremely problematic. In modern times, industrialization of agriculture has negatively affected the economy of small and middle-sized farms and strongly reduced the size of the rural labour market.

There are better basic services as well as other specialist services that aren't found in rural areas. There are more job opportunities and a greater variety of jobs. Health is another major factor. People, especially the elderly are often forced to move to cities where there are doctors and hospitals that can cater for their health needs. Other factors include a greater variety of entertainment (restaurants, movie theaters, theme parks, etc) and a better quality of education, namely universities. Due to their high populations, urban areas can also have much more diverse social communities allowing others to find people like them when they might not be able to in rural areas. These conditions are heightened during times of change from a pre-industrial society to an industrial one. It is at this time that many new commercial enterprises are made possible, thus creating new jobs in cities. It is also a result of industrialization that farms become more mechanized, putting many labourers out of work. This is currently occurring fastest in India.

Economic effects
In recent years, urbanization of rural areas has increased. As agriculture, more traditional local services, and small-scale industry give way to modern industry the urban and related commerce with the city drawing on the resources of an ever-widening area for its own sustenance and goods to be traded or processed into manufactures. Research in urban ecology finds that larger cities provide more specialized goods and services to the local market and surrounding areas, function as a transportation and wholesale hub for smaller places, and accumulate more capital, financial service provision, and an educated labor force, as well as often concentrating administrative functions for the area in which they lie. This relation among places of different sizes is called the urban hierarchy. As cities develop, effects can include a dramatic increase in costs, often pricing the local working class out of the market, including such functionaries as employees of the local municipalities. Urbanization is often viewed as a negative trend, but can in fact, be perceived simply as a natural occurrence from individual and corporate efforts to reduce expense in commuting and transportation while improving opportunities for jobs, education, housing, and transportation. Living in cities permits individuals and families to take advantage of the opportunities of proximity, diversity, and marketplace competition.

Environmental effects
The urban heat island has become a growing concern and is increasing over the years. The urban heat island is formed when industrial and urban areas are developed and heat becomes more abundant. In rural areas, a large part of the incoming solar energy is used to evaporate water from vegetation and soil. In cities, where less vegetation and exposed soil exists, the majority of the sun‘s energy is absorbed by urban structures and asphalt. Hence, during warm daylight hours, less evaporative cooling in cities allows surface temperatures to rise higher than in rural areas. Additional city heat is given off by vehicles and factories, as well as by industrial and domestic heating and cooling units. This effect causes the city to become 2 to 10o F (1 to 6o C) warmer than surrounding landscapes. Impacts also include reducing soil moisture and intensification of carbon dioxide emissions.


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Changing form of urbanization
Different forms of urbanization can be classified depending on the style of architecture and planning methods as well as historic growth of areas. In cities of the developed world urbanization traditionally exhibited a concentration of human activities and settlements around the downtown area, the so-called in-migration. In-migration refers to migration from former colonies and similar places. The fact that many immigrants settle in impoverished city centres led to the notion of the "peripheralization of the core", which simply describes that people who used to be at the periphery of the former empires now live right in the centre. Recent developments, such as inner-city redevelopment schemes, mean that new arrivals in cities no longer necessarily settle in the centre. In some developed regions, the reverse effect, originally called counter urbanization has occurred, with cities losing population to rural areas, and is particularly common for richer families. This has been possible because of improved communications, and has been caused by factors such as the fear of crime and poor urban environments. Later termed "white flight", the effect is not restricted to cities with a high ethnic minority population. When the residential area shifts outward, this is called suburbanization. A number of researchers and writers suggest that suburbanization has gone so far to form new points of concentration outside the downtown both in developed and developing countries such as India. This networked, poly-centric form of concentration is considered by some an emerging pattern of urbanization. It is called variously exurbia, edge city (Garreau, 1991), network city (Batten, 1995), or postmodern city (Dear, 2000). Los Angeles is the best-known example of this type of urbanization. Rural migrants are attracted by the possibilities that cities can offer, but often settle in shanty towns and experience extreme poverty. Urbanization can be planned urbanization or organic. Planned urbanization, ie: planned community or the garden city movement is based on an advance plan, which can be prepared for military, aesthetic, economic or urban design reasons. Examples can be seen in many ancient cities; although with exploration came the collision of nations, which meant that many invaded cities took on the desired planned characteristics of their occupiers. Many ancient organic cities experienced redevelopment for military and economic purposes, new roads carved through the cities, and new parcels of land were cordoned off serving various planned purposes giving cities distinctive geometric designs. UN agencies prefer to see urban infrastructure installed before urbanization occurs. Landscape planners are responsible for landscape infrastructure (public parks, sustainable urban drainage systems, greenways etc) which can be planned before urbanization takes place, or afterward to revitalize an area and create greater livability within a region.


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Counter urbanization

is a demographic and social process whereby people move from urban areas to rural areas. It first took place as a reaction to inner-city deprivation and overcrowding. Initial study of counter urbanization was carried out by human geographer Brian Berry.

The process involves the moving of the population away from urban areas such as towns and cities to a new town, a new estate, a commuter town or a village. The first two of these destinations were often encouraged by government schemes whereas the latter two were generally the choice of more middle class, socially mobile persons from their own prerogative. With the improvement of inner-city transport infrastructure, and more sustainable public transport, people no-longer have to live close to their work, and so can easily commute each day. Factors of moving Many factors can come in to account when someone decides to move from an urban area to a rural area including; housing density, housing prices, pollution levels (health afflictions), crime levels, peaceful retirement, and a wish to improve quality of life. Developments in rural electrification and rural Internet bring to rural areas some of the amenities of urbanity; thus eliminating one of the obstacles preventing some people from moving to a more rural setting. Pseudo-urbanization Pseudo-urbanization is the condition in which a large city has formed in an area without a functional infrastructure to support it. As the population of an urbanized area grows, the city's infrastructure must grow with it, or else shortages will develop, typically in housing, education, transportation, clean water and waste removal services, or other services such as law enforcement. Overpopulation in urban areas is often characterized by shanty towns, where such services are inadequate or wholly absent. A city in which significant growth in the absence of adequate infrastructure has taken place will be deemed "pseudo-urbanized". Urbanization in the third world tends to consist primarily of pseudo-urbanization. This happens largely because of so-called "rural push": factors which push people from the countryside into the cities, without the city being prepared to accept them. Rural-urban migrants in the third world usually move into the cities due to poverty-related reasons, leading to a demographic explosion and a progressive concentration of poor migrants in the cities. This is a finite process, as one city can only hold so many people due to limited infrastructure and available resources. Urban sprawl, also known as suburban sprawl, is a multifaceted concept, which includes the spreading outwards of a city and its suburbs to its outskirts to low-density and auto-dependent development on rural land, high segregation of uses (e.g. stores and residential), and various design features that encourage car dependency. As a result, some critics argue that sprawl has certain disadvantages, including:  High car dependence.  Inadequate facilities e.g.: cultural, emergency, health, etc.  Higher per-person infrastructure costs.

Inefficient street layouts.  Low diversity of housing and business types.  Higher per-capita use of energy, land, and water.  Perceived low aesthetic value. However, critics of the current mainstream of urban planning thought (which has become overwhelmingly anti-"sprawl") respond that sprawl also has certain advantages including:  More single family residences on larger lots.  Lower land prices.  Less experience of noise and pollution.  Suburban areas generally associated with "sprawl" tend to have lower crime and higherquality schools.  Perceived overwhelming consumer preference for sprawl-type developments. The term urban sprawl generally has negative connotations due to the health, environmental and cultural issues associated with the phrase. Residents of sprawling neighborhoods tend to emit more pollution per person and suffer more traffic fatalities. Sprawl is controversial, with supporters claiming that consumers prefer lower density neighborhoods and that sprawl does not necessarily increase traffic. Sprawl is characterized by several land use patterns which usually occur in unison:

Single-use zoning
This refers to a situation where commercial, residential, institutional and industrial areas are separated from one another. Consequently, large tracts of land are devoted to a single use and are segregated from one another by open space, infrastructure, or other barriers. As a result, the places where people live, work, shop, and recreate are far from one another, usually to the extent that walking, transit use and bicycling are impractical, so all these activities generally require an automobile.

Low-density zoning
Sprawl consumes much more land per-capita than traditional urban developments because zoning laws generally require that new developments are of low density. Buildings usually have fewer stories and are spaced farther apart, separated by lawns, landscaping, roads or parking lots. Lot sizes are larger, and because more automobiles are used much more land is designated for parking. The impact of low density development in many communities is that developed or "urbanized" land is increasing at a faster rate than the population. Overall density is often lowered by "leap-frog development". This term refers to the relationship, or lack thereof, between subdivisions. Such developments are typically separated by large green belts, i.e. tracts of undeveloped land, resulting in an average density far lower even than the low density described in the previous paragraph. This is a 20th and 21st century phenomenon generated by the current custom of requiring a developer to provide subdivision infrastructure as a condition of development.


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Car-dependent communities
Areas of urban sprawl are also characterized as highly dependent on automobiles for transportation, a condition known as automobile dependency. Most activities, such as shopping and commuting to work, require the use of a car as a result of both the area's isolation from the city and the isolation the area's residential zones have from its industrial and commercial zones. Walking and other methods of transit are not practical; therefore, many of these areas have few or no sidewalks. In many suburban communities, stores and activities that are in close proximity "as the crow flies" require automobiles, because the different areas are separated by fences, walls, and drainage ditches. Some critics argue that excessive parking requirements exacerbate car dependency.

Job Sprawl and Spatial Mismatch
Job Sprawl is another land use symptom of urban sprawl and car-dependent communities. It is defined as low-density, geographically spread-out patterns of employment, where the majority of jobs in a given metropolitan area are located outside of the main city's Central Business District (CBD), and increasingly in the suburban periphery. It is often the result of urban disinvestment, the geographic freedom of employment location allowed by predominantly cardependent commuting patterns of many American suburbs, and many companies' desire to locate in low-density areas that are often more affordable and offer potential for expansion. Spatial mismatch is related to job sprawl and economic Environmental Justice. Spatial Mismatch is defined as the situation where poor urban, predominantly minority citizens are left without easy access to entry-level jobs, as a result of increasing job sprawl and limited transportation options to facilitate a reverse commute to the suburbs.

Developments characteristic of sprawl
Housing subdivisions
Housing subdivisions are large tracts of land consisting entirely of newly-built residences. Prominent New Urbanist architectural firm Duany Plater-Zyberk & Company claim that housing subdivisions ―are sometimes called villages, towns, and neighborhoods by their developers, which is misleading since those terms denote places which are not exclusively residential.‖ They are also referred to as developments. Subdivisions often incorporate curved roads and cul-de-sacs. Such subdivisions may offer only a few places to enter and exit the development, causing traffic to use high volume collector streets. All trips, no matter how short, must enter the collector road in a suburban system.

Strip malls
Shopping centers are locations consisting of retail space. In the U.S. and Canada, these vary from strip malls which refer to collections of buildings sharing a common parking lot, usually built on a high-capacity roadway with commercial functions.


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Shopping malls
Another prominent form of retail development in areas characterized by "sprawl" is the shopping mall. Unlike the strip mall, this is usually composed of a single building surrounded by a parking lot which contains multiple shops, usually "anchored" by one or more department stores (Gruen and Smith 1960). The function and size is also distinct from the strip mall. The focus is almost exclusively on recreational shopping rather than daily goods. Shopping malls also tend to serve a wider (regional) public and require higher-order infrastructure such as highway access and can have floorspaces in excess of a million square feet (ca. 100,000 m²). Shopping malls are often detrimental to downtown shopping centers of nearby cities since the shopping malls acts as a surrogate for the city center.

Fast food chains
Fast food chains are common in suburban areas. They are often built early in areas with low property values where the population is expected to boom and where large traffic is predicted, and set a precedent for future development.

Smart growth and the Compact City The term 'smart growth' has been particularly used in North America. The terms 'compact city' or 'urban intensification' are often used to describe similar concepts, in Europe and particularly the UK where it has influenced Government policy and planning practice in recent years.

Transit-, bicycling- and pedestrian-oriented developments
Transit-oriented development While cities such as Los Angeles are well known for sprawling suburbs, policies and public opinion are changing. Transit-oriented development, in which higher-density mixed-use areas are permitted or encouraged near transit stops is encouraging more compact development in certain areas-particularly those with light and heavy rail transit systems.

Bicycling-oriented development (BOD) Bicycles are the preferred means of travel in many countries. Also, bicycles are permitted in public transit. Businesses in areas of some towns where bicycle use is high are thriving. Bicycles and transit are contributing in two important ways toward the success of businesses:  First is that on average the people living the closest to these business districts have more money to spend locally because they don‘t spend as much on their cars.  Second, because these people rely more on bicycling, walking and transit than on driving, they tend to focus more of their commerce on locally-owned neighborhood businesses that are convenient for them to reach.


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Pedestrian-oriented development Walk ability is a measure of how friendly an area is to walking. Walkability has many health, environmental, and economic benefits. However, evaluating walkability is challenging because it requires the consideration of many subjective factors. Factors influencing walkability include the presence or absence and quality of footpaths, sidewalks or other pedestrian right-of-ways, traffic and road conditions, land use patterns, building accessibility, and safety, among others.Walkability is an important concept in sustainable urban design.

Health and environmental impact
Urban sprawl is associated with a number of negative environmental and public health outcomes, with the primary result being increased dependence on automobiles. However, this is mitigated significantly with nearby development of shopping and recreation areas. Also, many people prefer to live close to their place of business which is increasingly centered less around urban areas. Increased pollution and reliance on fossil fuel In the years following World War II, when vehicle ownership was becoming widespread, public health officials recommended the health benefits of suburbs due to soot and industrial fumes in the city center. However, air in modern suburbs is not necessarily cleaner than air in urban neighborhoods. In fact, the most polluted air is on crowded highways, where people in suburbs tend to spend more time. On average, suburban residents generate more per capita pollution and carbon emissions than their urban counterparts because of their increased driving. Increase in traffic and traffic-related fatalities A heavy reliance on automobiles increases traffic throughout the city as well as automobile crashes, pedestrian injuries, and air pollution. Motor vehicle crashes are the leading cause of death for Americans between the ages of five and twenty-four and is the leading accidentrelated cause for all age groups. Residents of more sprawling areas are at greater risk of dying in a car crash

Decrease in social capital
Urban sprawl may be partly responsible for the decline in social capital in the United States. Compact neighborhoods can foster casual social interactions among neighbors, while sprawl creates barriers. Sprawl tends to replace public spaces with private spaces such as fenced-in backyards. Decrease in land and water quantity and quality Due to the larger area consumed by sprawling suburbs compared to urban neighborhoods, more farmland and wildlife habitats are displaced per resident. As forest cover is cleared and covered with impervious surfaces (concrete and asphalt) in the suburbs, rainfall is less effectively absorbed into the ground water aquifers. This threatens both the quality and quantity of water supplies. Sprawl increases water pollution as rain water picks up gasoline, motor oil,

heavy metals, and other pollutants in runoff from parking lots and roads. Sprawl fragments the land which increases the risk of invasive species spreading into the remaining forest.

Increased infrastructure costs
Living in larger, more spread out spaces generally makes public services more expensive. Since car usage becomes endemic and public transport often becomes significantly more expensive, city planners are forced to build large highway and parking infrastructure, which in turn decreases taxable land and revenue, and decreases the desirability of the area adjacent to such structures. Providing services such as water, sewers, and electricity is also more expensive per household in less dense areas.

Increased personal transportation costs
Residents of low-density areas spend a higher proportion of their income on transportation than residents of high density areas.

Neighborhood quality
Critics of sprawl maintain that quality of life is eroded by lifestyles promoted by sprawl promotes. Traditional neighborhoods the nearness of the workplace to retail and restaurant space that provides cafes and convenience stores with daytime customers is an essential component to the successful balance of urban life. Furthermore, they state that the closeness of the workplace to homes also gives people the option of walking or riding a bicycle to work or school and that without this kind of interaction between the different components of life the urban pattern quickly falls apart, poor aesthetics in suburban environments make them "places not worth caring about", and that they lack a sense of history and identity.

White Flight Some blame suburbs for what they see as homogeneity of society and culture, leading to sprawling suburban developments of people with similar race, background and socioeconomic status. They claim that segregated and stratified development was institutionalized in the early 1950s and 1960s with the financial industries' then-legal process of redlining neighborhoods to prevent certain people from entering and residing in affluent districts. Sprawl may have a negative impact on public schools as finances have been pulled out of city cores and diverted to wealthier suburbs. They argue that the residential and social segregation of whites from blacks in the United States creates a socialization process that limits whites' chances for developing meaningful relationships with blacks and other minorities, and that the segregation experienced by whites from blacks fosters segregated lifestyles and can lead to positive views about themselves and negative views about blacks. Urban Sprawl and Automobile dependency Whether urban sprawl does increase does cause problems of automobile dependency and whether conversely, policies of smart growth can reduce them have been fiercely contested issues over several decades.


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Suburban colonization
The suburban colonization process is observed in larger cities that have suffered population and political power loss to suburbs. Other colonialism is often studied for the effects upon those already inhabiting the colonized area, but students of suburban colonization tend to take greater interest in the effects upon the metro pole. Division of labour Trade and economic interdependence. The division of labour makes trade necessary and is the source of economic interdependence. Global division of labour There exist, as yet, few comprehensive studies of the global division of labour (an intellectual challenge for researchers), although the ILO and national statistical offices can provide plenty of data on request for those who wish to try. Urban morphology Urban morphology is the study of the form of human settlements and the process of their formation and transformation. The study seeks to understand the spatial structure and character of a metropolitan area, city, town or village by examining the patterns of its component parts and the process of its development. This can involve the analysis of physical structures at different scales as well as patterns of movement, land use, ownership or control and occupation. Typically, analysis of physical form focuses on street pattern, lot (or, in the UK, plot) pattern and building pattern, sometimes referred to collectively as urban grain. Analysis of specific settlements is usually undertaken using cartographic sources and the process of development is deduced from comparison of historic maps. Special attention is given to how the physical form of a city changes over time and to how different cities compare to each other. Another significant part of this subfield deals with the study of the social forms which are expressed in the physical layout of a city, and, conversely, how physical form produces or reproduces various social forms.

People Flow People Flow as a concept relates to the phenomenon of masses of people moving around in buildings in an organized, comfortable and safe way. Urbanization and the ageing of population are the key mega trends creating the need for managing traffic flow in cities and people flow in buildings. A ―mega trend‖ is a concept to describe a phenomenon that significantly changes the structure of society. Often the change is global. As of 2005 more than 50% of the world population lived in cities and the process of urbanization is expected to continue. As the population in cities increases, and the subsequent environmental challenges need to be taken care of, cities are forced to grow tighter and upwards. Challenges arising from this trend are the congestion and crowding of cities. However, as history records show, successful urbanization is a prerequisite for economic growth.


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Contributors to urbanization:
The Neolithic Revolution is the first agricultural revolution—the transition from hunting and gathering to agriculture and settlement. Archaeological data indicate that various forms of domestication of plants and animals arose independently in six separate locales worldwide, with the earliest known developments taking place in India and the Middle East around 10,000 BP.

Consequences of the Neolithic Revolution
Social change It is often argued that agriculture gave humans more control over their food supply, but this has been disputed by the finding that nutritional standards of Neolithic populations were generally inferior to that of hunter gatherers, and life expectancy may in fact have been shorter, in part due to diseases. British Agricultural Revolution The British Agricultural Revolution describes a period of development in Britain between the 17th century and the end of the 19th century, which saw an epoch-making increase in agricultural productivity and net output. This in turn supported unprecedented population growth, freeing up a significant percentage of the workforce, and thereby helped drive the Industrial Revolution. How this came about is not entirely clear. In recent decades, enclosure, mechanization, four-field crop rotation, and selective breeding have been highlighted as primary causes, with credit given to only a relatively few individuals Effects on history The agricultural productivity of Britain grew significantly in the period of the agricultural revolution. It is estimated that the productivity of wheat was about 19 bushels per acre in 1720 and that it has grown to 21-22 bushels in the middle of the eighteenth century. It declined slightly in the decades of 1780 and 1790 but it began to grow again by the end of the century and reached a peak in the 1840s around 30 bushels per acre, stabilizing thereafter. The Industrial Revolution was a period from the 18th to the 19th century where major changes in agriculture, manufacturing, mining, transport and technology had a profound effect on the socioeconomic and cultural conditions starting in the United Kingdom, then subsequently spreading throughout Europe, North America, and eventually the world. The Industrial Revolution marks a major turning point in human history; almost every aspect of daily life was eventually influenced in some way. Most notably, average income and population began to exhibit unprecedented sustained growth. In the two centuries following 1800, the world's average income increased over 10-fold, while the world's population increased over 6-fold. In the words of Nobel Prize winning Robert E. Lucas, Jr., "For the first time in history, the living standards of the masses of ordinary people have begun to undergo sustained growth. ... Nothing remotely like this economic behavior has happened before." Starting in the later part of the 18th century there began a transition in parts of Great Britain's previously manual labour and draft-animal–based economy towards machine-based manufacturing. It started with the mechanization of the textile industries, the development of iron-making techniques and the increased use of refined coal. Trade expansion was enabled by the introduction of canals,

improved roads and railways. The introduction of steam power fuelled primarily by coal, wider utilization of water wheels and powered machinery (mainly in textile manufacturing) underpinned the dramatic increases in production capacity. The development of all-metal machine tools in the first two decades of the 19th century facilitated the manufacture of more production machines for manufacturing in other industries. The effects spread throughout Western Europe and North America during the 19th century, eventually affecting most of the world, a process that continues as industrialization. The impact of this change on society was enormous. The first Industrial Revolution, which began in the 18th century, merged into the Second Industrial Revolution around 1850, when technological and economic progress gained momentum with the development of steam-powered ships, railways, and later in the 19th century with the internal combustion engine and electrical power generation. The period of time covered by the Industrial Revolution varies with different historians. Industrialization is the process of social and economic change that transforms a human group from a pre-industrial society into an industrial one. It is a part of a wider modernization process, where social change and economic development are closely related with technological innovation, particularly with the development of large-scale energy and metallurgy production. It is the extensive organization of an economy for the purpose of manufacturing. Industrialization also introduces a form of philosophical change where people obtain a different attitude towards their perception of nature, and a sociological process of ubiquitous rationalization.

History of industrialization
Most pre-industrial economies had standards of living not much above subsistence, aming that the majority of the populations were focused on producing their means of survival. For example, in medieval Europe, 80% of the labour force was employed in subsistence agriculture. Some pre-industrial economies, such as classical Athens, had trade and commerce as significant factors, so native Greeks could enjoy wealth far beyond a sustenance standard of living through the use of slavery. Famines were frequent in most pre-industrial societies, although some, such as the Netherlands and England of the seventeenth and eighteenth centuries, the Italian city states of the fifteenth century, the medieval Islamic Caliphate, and the ancient Greek and Roman civilizations were able to escape the famine cycle through increasing trade and commercialization of the agricultural sector. It is estimated that during the seventeenth century Netherlands imported nearly 70% of its grain supply and in the fifth century BC Athens imported three quarters of its total food supply. Industrialization through innovation in manufacturing processes first started with the Industrial Revolution in the north-west and Midlands of England in the eighteenth century. It spread to Europe and North America in the nineteenth century, and to the rest of the world in the twentieth. Industrial revolution in Western Europe In the eighteenth and nineteenth centuries, Great Britain experienced a massive increase in agricultural productivity known as the British Agricultural Revolution, which enabled an unprecedented population growth, freeing a significant percentage of the workforce from farming, and helping to drive the Industrial Revolution.

Due to the limited amount of arable land and the overwhelming efficiency of mechanized farming, the increased population could not be dedicated to agriculture. New agricultural techniques allowed a single peasant to feed more workers than previously; however, these techniques also increased the demand for machines and other hardware‘s, which had traditionally been provided by the urban artisans. Artisans, collectively called bourgeoisie, employed rural exodus workers to increase their output and meet the country's needs. Industrialization in Asia Apart from Japan, where industrialization began in the late 19th century, a different pattern of industrialization followed in East Asia. China and India, while roughly following this development pattern, made adaptations in line with their own histories and cultures, their major size and importance in the world, and the geo-political ambitions of their governments (etc.). Currently, China's government is actively investing in expanding its own infrastructures and securing the required energy and raw materials supply channels, is supporting its exports by financing the United States balance payment deficit through the purchase of US treasury bonds, and is strengthening its military in order to endorse a major geopolitical role. Meanwhile, India's government is investing in specific vanguard economic sectors such as bioengineering, nuclear technology, pharmaceutics, informatics, and technologically-oriented higher education, openly over passing its needs, with the goal of creating several specialization poles able to conquer foreign markets. Both Chinese and Indian corporations have also started to make huge investments in Third World countries, making them significant players in today's world economy. Newly industrialized countries In recent decades, a few countries in Latin America, Asia, and Africa, such as Turkey, South Africa, Malaysia, Philippines and Mexico have experienced substantial industrial growth, fuelled by exportations going to countries that have bigger economies: the United States, Japan, China, India and the EU. They are sometimes called newly-industrialized countries.

Effects of Industrial Revolution
The industrial revolution changed the world in a manner that very few other developments in the world have. The mainly local and isolated feudal-medieval economy was made a thing of the past and the world became increasingly interconnected. Revolution, in the simplest terms, means a great change. The industrial revolution was a process that started in the middle of the eighteenth century and introduced many changes in agriculture, method and system of production of goods, transport, mining, and economic policies. All these areas were connected, and changes in one resulted changes in the other. Furthermore, these changes metamorphosed the social equations and relations. The process is said to have begun in the middle of the eighteenth century in England with the mechanization of textile production. However, many believe that this was the culmination of many other processes that had begun almost two hundred years ago. Later, the revolution also spread to other parts of Europe.


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Starting Process Surplus produce in agricultural sector is the basic requirement for sustaining an urban population not engaged in food production. In the eighteenth century, English farmers started using farm implements made from metal, instead of the wooden equipment used earlier. Some other improvements in agricultural knowledge led to elimination of the need to keep land fallow for restoring its fertility. This led to surplus agricultural production. Another change in this sphere was the enclosure movement, wherein small farmers were deprived of the common village lands by the rich farmers. As a result, the labor of these small farmers were available for other industries. Mechanization of production was another important change. James Hargreaves invented the jenny, which allowed an operator to spin multiple threads at the same time. Next came Arkwright, with his water-powered factory. These inventions led to an exponential increase in the production of textiles. Water power, which had replaced manual and animal power, was later replaced by steam power. Changes were also introduced into the system of production. Earlier, production was scattered. People manufactured textiles in their house, using their own equipment. This was a second line occupation practiced by people in their spare time. The system was known as putting out system, where production was decentralized or given out. This was replaced by the factory system, in which the production was done at one place - the factory. Production equipment was provided by the owners of the factory, and the workers worked at pre-determined salaries. Above all, workers had no rights over the produce which was owned by the factory owner. This led to the development of capitalism - the owner provided the initial money, equipment and location for production. He owned the produce and sold it for a profit. Surplus production would require an efficient transport system, right from procurement of raw materials to transportation of finished goods. This required the development of road, rail and shipping. The steam engine required coal, and fuel and iron would be required to make rails, railway compartments, ships, etc. As a result, mining of coal and iron also saw many alterations. Effects and consequences of Industrial Revolution In the last part of the 18th century, a new revolution gripped the world that we were not ready for. This revolution was not a political one, but it would lead to many implications later in its existance. Neither was this a social or cultural revolution. This revolution was an economic one. The Industrial Revolution, as it know called by historians, changed the ways by how the world produced its goods. It also changed our societies from a mainly agricultural society to one that in which industry and manufacturing was in control. The industrial revolution first got its start in Great Britian, during the 18th century, which at the time was the most powerful empire on the planet. So, it ws inevitable that the country with the most wealth would led in this revolution. After it adoption in England, other countries such as Germany, the United States and France joined in this revolution. During this time there were also many new technological advancements, socioeconomic and cultural problems that arised. On the technology front, the biggest advancements were in steam power. New fuels such as coal and petroleum, were incorporated into new steam engines. This revolutionized many industries including textiles and manufacturing. Also, a new communication

medium was invented called the telegraph. This made communicating across the ocean much faster. But, along with this great leap in technology, there was an overall downfall in the socioeconomic and cultural situation of the people. Growth of cities were one of the major consequences of the Industrial Revolution. Many people were driven to the cities to look for work, in turn the ended living in the cities that could not support them. With the new industrial age, a new qauntitative and materialistic view of the world took place. This caused the need for people to consume as much as they could. This still happens today. Living on small wages that required small children to work in factories for long days. Also, during this time much international strife was occuring at this time. The American Revolution was occurring in the beginning part of the Industrial Revolution. The French Revolution was in the process at the turn of the 19th century. This was a great time, but resulted in newly found democratic rights that spread through Europe and North America. The Industrial Revolution, was not a good revolution for the planet. From the time of its start, the factories and industry has increased the amount of carbon dioxide in the atmosphere by twofolds. Also in our drive for consumerism, our planets natural resources are being depleted at an alarming rate. Pollution by nuclear waste, pesticides and other chemicals are also the result of the Industrial Revolution. The working conditions in mines were horrible, to say the least. Furthermore, women and children were employed as they could be paid lower wages than adult male workers. Child laborers possessed another advantage - they could easily crawl through the narrow passages in mines. The situation in factories was not very different. The workers could not bargain for better conditions and payments, as there was an abundant supply of workers available in the form of displaced peasants and farmers. If one would protest, he would be fired - and there was always someone else ready to replace him. Also, the capitalists were becoming richer by the day. Using their wealth, they were influencing the policies and laws of the government. This influence was naturally harmful to the labor class. This led to the organization of labor unions, and subsequently to the development of the concept of socialism. The migration of such a huge population to cities resulted in the overcrowding of cities and development of slums. The pace of urbanization quickened to unprecedented levels. The migration also broke the social ties the worker (i.e. the former peasant or farmer) was used to in villages. This, along with the deplorable living conditions, caused many other problems like alcoholism, illicit relationships, loneliness, etc. This degraded the quality of life to such an extent that it was said: "the shortest route out of Manchester is a glass of whiskey". The capitalists emerged from the hitherto middle class. The industrial revolution expression of their strength. Their power increased in leaps and bounds. They had the influence the government. They acquired a stranglehold over politics which continues Other customs like the importance of punctuality and taking appointments before people, also started during this was an funds to till date. meeting age.

The greatest changes of the effects due to the industrial revolution were visible all over the world. A capitalist had two main requirements for making windfall profits. One was cheap supply

of raw materials, and the other was a ready market. Both of these were available in colonies. This led to the colonization of many lands in Asia, Africa and South America. The economies of the colonies were comprehensively subordinated to the mother nation. This resulted in a scramble for colonies amongst the great powers of that age. Although England was the strongest power; France, Holland, Portugal, Denmark, and later, Germany and Italy also entered the race. This race led to imperialism, culminating in the two World Wars. English exports were creating problems for the industrial development of other powers. To control this, tariffs were imposed on British goods, leading to tariff barriers. As a result of colonization, events in one part of the world started influencing events in other parts of the world as well. This is the simplest description of globalization. The origin of many modern phenomena and problems can be traced back to the industrial revolution. The industrial revolution was primarily the economic dimension of the change from the middle age to the modern age. This subject, hence, makes valuable study material for anyone attempting to study the modern times. Impact of the Industrial Revolution There were many artistic movements during the period of Britain's industrialization, each of which was a reaction to the feelings of the time, as well as to the movement which had preceded it. By the time that the Industrial Revolution really took hold, some artists were at differences with the ideals which it espoused, such as those of discipline, temperance, structure, and views of the Enlightenment. These feelings translated into the Romantic movement, which encouraged individualism, freedom, and emotion. Romanticism was probably the most important artistic movement to flourish during the Industrial Revolution. It had the most widespread effects on the general population, and its artistic achievements are still admired today. Fundamental Shifts in Social Structure During the Industrial Revolution, the social structure of society changed dramatically. Before the Revolution most people lived in small villages, working either in agriculture or as skilled craftsmen. They lived and often worked as a family, doing everything by hand. In fact, three quarters of Britain's population lived in the countryside, and farming was the predominant occupation. With the advent of industrialization, however, everything changed. The new enclosure laws—which required that all grazing grounds be fenced in at the owner's expense— had left many poor farmers bankrupt and unemployed, and machines capable of huge outputs made small hand weavers redundant. As a result, there were many people who were forced to work at the new factories. This required them to move to towns and cities so that they could be close to their new jobs. It also meant that they made less money for working longer hours. Add to this the higher living expenses due to urbanization, and one can easily see that many families' resources would be extremely stretched. As a result, women and children were sent out to work, making up 75% of early workers. Families were forced to do this, since they desperately needed money, while factory owners were happy to employ women and children for a number of reasons. First of all, they could be

paid very little, and children could be controlled more easily than adults, generally through violent beatings. Children also had smaller hands, which were often needed to reach in among the parts of a machine. Furthermore, employers found that children were more malleable, and adapted to the new methods much better than adults did. Children were also sent to work in mines, being small enough to get more coal and ore from the deep and very often unsafe pits. They could also be forced to work as long as eighteen hours each day. For these reasons, children as young as eight years old were sent to factories—usually those which manufactured textiles—where they became part of a growing and profitable business . This unprecedented growth and profit was another social change that occurred during the Industrial Revolution. The laissez-faire approach taken by the government—and advocated by philosopher-economist Adam Smith—allowed capitalism to flourish. There were little or no government regulations imposed upon factory policies, and this allowed the wealthy, middleclass owners to pursue whichever path was most profitable, regardless of the safety and well being of their workers. This relentless pursuit of money caused another important social change: the ultimate breakdown of the family unit. Since workers, especially women and children, were labouring for up to eighteen hours each day, there was very little family contact, and the only time that one was at home was spent sleeping. People also had to share housing with other families, which further contributed to the breakdown of the family unit. As a result, children received very little education, had stunted growth, and were sickly. They also grew up quite maladjusted, having never been taught how to behave properly. The living conditions were indeed horrible; working families often lived in slums with little sanitation, and infant mortality skyrocketed. During the early Industrial Revolution, 50% of infants died before the age of two. However, the social changes that took place were not all negative. Most classes eventually benefited in some way from the huge profits that were being made, and by 1820 most workers were making somewhat better wages. The "widespread poverty and constant threat of mass starvation…lessened, [and] overall health and material conditions of the populace clearly improved". The government, however, did have to eventually intervene in order to put an end to child labour and other unacceptable practices. Effects of the Industrial Revolution on Politics Although Britain had become a constitutional monarchy a century earlier, the vast majority of the population remained disenfranchised from the electoral system. As industrial strength grew along with a more forcible middle class, electoral reform was a necessity to balance the new society's power structure.  Before 1832, only 6% of the male population could vote - represented by aristocrats who owned large plots of land in the countryside and other property.  By 1832, the middle class factory owners wanted political power to match their new-found economic punch - this resulted in the Reform Bill of 1832 which enfranchised 20% of the male population to vote.  The Reform Bill also redistributed electoral districts to better reflect the large populations of city centres. Before, most of the electoral power could be found in the countryside where aristocrats owned vast properties.


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The middle-class became more or less satisfied, but workers were still not represented by the British electoral system. Chartism The dissent and insubordination of the English workingmen reached its peak in the midnineteenth century with Chartism, an ideology that called for political reform in the country. Its name was based on the People's Charter, a document written in 1838 by William Lovett and other radicals of the London Working Men's Association, and adopted at a national convention of workingmen's organizations in August of that year. The Charter called for several changes to the Parliamentary system: o Universal Male Suffrage o Annual Parliaments o Vote by ballot o Abolition of the property qualification for MPs o Payment of MPs o Equal electoral constituencies (Chartism - too much talk, too little action) Chartism rapidly gained support among the poorer classes and in Northen England, where economic depression was common and the people were upset about the new Poor Law Amendment. The public attention was largely thanks to Feargus O'Connor, a fervent radical with excellent oratory skills. However, the movement soon lost its momentum when its leaders became divided over how its demands were to be enforced. A petition to Parliament was rejected in July of 1839, and most of the movement's leaders were arrested by the end of the year after the November clash between Chartists and the military at Newport, Wales. O'Connor attempted to revive Chartism in 1840 by founding the National Charter Association, but the people had generally lost interest, appeased by better economic conditions, a revival of trade unionism, and the growth fo the the Anti-Corn Law League. After a mass demonstration and procession planned for London during an economic crisis in 1848 failed to take place, the Chartist movement faded away altogether. Decades later, in 1884, the majority of males were finally granted the right to vote unit. The Industrial "Revolution" The industrialization of Europe, like the French Revolution, left a permanent mark on society. Life as it was described in the 18th century changed drastically; classes shifted, wealth increased, and nations began assuming national identities. Describing this industrialization as a revolution is apt - despite the longer timeframe involved, the social consequences and economic changes that the world has faced because of industrialization easily equate the political effects that any of the European revolutions had. The changes can not be underestimated in importance to society today. Effects on the Rest of the World  The quick industrialization across Europe during the 19th century led to a great increase in goods produced as well as a demand for raw materials.  This demand, coupled with increased nationalist pride, led nations to seek colonies abroad in which to produce and trade goods.


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The main expansion for the European colonial powers occurred in Africa. By 1914, the entire continent with the exception of Liberia and Abyssinia were controlled by European nations. England also took control of India and Hong Kong during this period of expansion. By the beginning of WWI, England had an empire which stretched across every continent in the world. Vast amounts of natural resources were extracted from these colonies, which aided the British industrial effort but left many of the nations bankrupt. In short, industrialization in Europe had far reaching consequences for the rest of the world. While it made Britain the ultimate power for over a century, it can be argued that its rule over the world caused conflict and internal strife which continues to this day.

Indian Census Definition of Urban Area In Census of India, 2001 two types of town were identified (R.G,2001): a) Statutory towns : All places with a municipality, corporation, Cantonment board or notified town area committee, etc. so declared by state law. b) Census towns : Places which satisfy following criteria :i) a minimum population of 5000 ; ii) atleast 75% of male working population engaged in non agricultural pursuits; and iii) a density of population of atleast 400 persons per sq km

Urban Agglomeration
Urban agglomeration is a continuous urban spread constituting atown and its adjoining urban outgrowths (OGs) or two or more physical contiguous town together and any adjoining urban out growths of such towns. Examples of out growths are railway colonies, university campus, port area, military campus etc. that may come up near a statutory town or city. For census of India, 2001 it was decided that the core town or at least one of the constituent towns of an urban agglomeration should necessarily be a statutory town and the total population of all the constituents should not be less than 20,000( as per 1991Census). With these two basic criteria (R.G 2001) having been met the following are the possible different situations in which urban agglomerations could be constituted. Volume and Trend of Urbanization in India India shares most characteristic features of urbanization in the developing countries. Number of urban agglomeration /town has grown from 1827 in 1901 to 5161 in 2001. Number of total population has increased from 23.84 crores in 1901 to 102.7 crores in 2001 whereas number of population residing in urban areas has increased from 2.58 crores in 1901 to 28.53 crore in2001. This process of urbanization in India is shown in Fig 1 . It reflects a gradual increasing trend of urbanization. India is at acceleration stage of the process of urbanization.


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Pace of Urbanization Urbanization in India has been relatively slow compared to many developing countries. The percentage of annual exponential growth rate of urban population (table 5) reveals that in India it grew at faster pace from the decade 1921-31 to until 1951. Thereafter it registered a sharp drop during the decade 1951-61. The decades 1961-71 and 1971-81 showed a significant improvement in the growth which has thereafter steadily dropped to the present level 2.7. The sharp drop in urban rate during 1951-61 was mainly due to declassification of a very large number of towns during that period. Rural growth has been fluctuating since 1901. The decline in rural population growth was within small range during 1981-91 and 1991-2001 This fact is supported in case of Indian urbanization also since 1911. Million -Plus cities in India Number of million plus cities(table: 8) have increased from 5 in 1951 to 23 in 1991 and to 35 in 2001. About 37% of the total urban population live in these million plus/ UA cities. As per 2001 census the newly added million plus cities are 12 in numbers, they are Agra, Meerut, Nashik, Jabalpur, Jamshedpur, Asansol, Dhanbad, Faridabad, Allahabad, Amritsar, Vijaywada, Rajkot.

Basic Feature and Pattern of India's Urbanization
1. Lopsided urbanization induces growth of class I cities 2. Urbanization occurs without industrialization and strong economic base 3. Urbanization is mainly a product of demographic explosion and poverty induced rural urban migration. 4. Rapid urbanization leads to massive growth of slum followed by misery,poverty, unemployment, exploitation, inequalities, degradation in the quality of urban life. 5. Urbanization occurs not due to urban pull but due to rural push. 6. Poor quality of rural-urban migration leads to poor quality of urbanization (Bhagat,1992). 7. Distress migration initiates urban decay Problem of Urbanization Problem of urbanization is manifestation of lopsided urbanization, faulty urban planning, urbanization with poor economic base and without having functional categories. Hence India's urbanization is followed by some basic problems in the field of : 1) Housing 2) Slums 3) Transport 4) Water supply and sanitation 5) Water pollution and air pollution 6) Inadequate provision for social infrastructure ( school, hospital, etc ).

Class I cities such as Calcutta , Bombay, Delhi, Madras etc have reached saturation level of employment generating capacity. Since these cities are suffering from of urban poverty, unemployment, housing shortage, crisis in urban infra-structural services these large cities can not absorb these distressed rural migrants i.e poor landless illiterate and unskilled agricultural labourers. Hence this migration to urban class I cities causes urban crisis more acute. Most of these cities using capital intensive technologies can not generate employment for these distress rural poor. So there is transfer of rural poverty to urban poverty. Poverty induced migration of illiterate and unskilled labourer occurs in class I cities addressing urban involution and urban decay. Indian urbanization is involuted not evoluted. Poverty induced migration occurs due to rural push. Megacities grow in urban population not in urban prosperity, and culture. Hence it is urbanization without urban functional characteristics. These mega cities are subject to extreme filthy slum and very cruel mega city denying shelter, drinking water, electricity, sanitation to the extreme poor and rural migrants. Urbanization is degenerating social and economic inequalities which warrants social conflicts, crimes and anti-social activities. Lopsided and uncontrolled urbanization led to environmental degradation and degradation in the quality of urban life---- pollution in sound, air, water, created by disposal of hazardous waste. Illiterate, low- skill or no-skill migrants from rural areas are absorbed in poor low grade urban informal sector at a very low wage rate and urban informal sector becomes in-efficient and unproductive.

Policy Implication  Redirection of investment is recommended to develop strong economic base for small and medium city neglected so far.  Redirection of migration flows is required. Since the mega cities have reached saturation level for employment generation and to avoid over-crowding into the over congested slums of mega cities i.e Bombay, Calcutta, Delhi, Madras etc it is required to build strong economic sector in the urban economy, growth efforts and investments should be directed towards small cities which have been neglected so far so that functional base of urban economy is strengthened. Then redirection of migration to these desirable destination will be possible.  Policy should also relate to proper urban planning where city planning will consist of operational developmental and restorative planning.Operational planning should take care of improvement of urban infrastructure, e.g roads, traffic, transport etc. Developmental planning should emphasize on development of newly annexed urban areas. Various urban renewal process can be used.  Restorative planning should aim to restore original status of old building monuments which have historic value. In general urban planning must aim at –

a) Balanced regional and urban planning b) Development of strong economic base for urban economy c) Integration of rural and urban economy-- emphasis on agro-based industry. Raw material should be processed in rural economy and then transferred to urban economy. c) Urban planning and housing for slum people with human face.

Urban labor markets are characterized by the spatial proximity of households and businesses, which offers firms and workers advantages that lead to more efficient markets, enhanced productivity, and greater economic success. Nevertheless, the nation's city, while generating a large proportion of the nation's wealth, houses much of the nation's economic disadvantaged workers. In every developed economy, cities are the center of economic activity and opportunity. They bring together businesses, workers, and customers into close physical proximity, which offers firms and workers advantages that lead to more efficient markets, enhanced productivity, and greater economic success. These benefits come about in several ways. Large metropolitan areas allow firms and workers to specialize in activities in which they hold a comparative advantage. By being close to suppliers and customers, firms can build efficient supply networks that lower costs and enhance productivity. Also, dense, urban environments enhance the flow of ideas and the transfer of technology through informational networks, which create growth enhancing spillovers to firms. Workers also rely on informational networks to add to their general knowledge, establish support groups, enhance job-related skills, and gain access to job openings. Consequently, the physical and informational proximity of businesses and workers within metropolitan areas yields the nation's most productive activities, spawns technological and organizational innovations, and launches new business ventures. For most urban residents, economic success is determined by the jobs and income generated by labor markets. A labor market rewards those people with the appropriate skills, energy, and ideas. Acquisition of these qualifications results from long-run decisions to invest in education and training, to choose work over leisure, and to be networked with people who been successful. Labor markets also provide the signals and incentives for individuals to make these decisions and to be in a position to take advantage of opportunities when they arise. By offering the greatest opportunity for economic success, cities attract both the nation's most talented and successful individuals and the most disadvantaged. While people of all skills are important to generate the economic complementarities that enhance productivity, many of the least skilled people do not find the success they had hoped for. Therefore, cities stand as a stark dichotomy of those who have succeeded and those who have not. They generate a large proportion of the nation's wealth but also house much of the nation's poverty and homelessness. Cities have always exhibited this stark contrast between those who have achieved economic success and those who have not. The ancient Greek philosopher Plato gave commentary to his times in observing that "there are two cities: One for the rich and one for the poor" (The Republic). The

ability of urban labor markets to improve the quality of life for all groups of workers varies over time. In recent years, opportunities for economic advancement have diminished. Real earnings growth has slowed to a paltry 0.9 percent during the last decade. Worse yet, only those individuals with college degrees experienced improvements in real income; people with high school degrees or less saw their real earnings decline. The slowdown in earnings and the rise in income inequality have placed considerable stress on cities. Many cities have been unable to make sufficient investments in physical and human capital required for efficient markets and the easy flow of information. As the core structure of cities deteriorates and the advantages of close proximity diminish, businesses and households have left inner cities for outlying areas. This shift in location has left inner cities with fewer resources to devote to mounting social problems. This shift has also helped to diminish the nation's capacity to spawn high-productivity, high-growth activities. For individuals, these issues include slow wage growth, increased earnings inequality, persistent earnings gap between whites and minorities, disparity in job opportunities and earnings between inner cities and suburbs, the spatial mismatch of jobs, and the increased isolation of many inner city residents. For the nation, the issues are the social fallout from growing income disparities and reduced income mobility and the economy's diminished growth capacity as the physical and social infrastructure supporting urban area markets deteriorates. It is appropriate for the federal government to create and carry out a national urban policy for two reasons. First, many of the issues listed above are related to the redistribution of income, which is a traditional function of the federal government. Second, the close proximity of activities within metropolitan areas generates externalities that contribute more than proportionately to growth and that compound the many social problems facing cities. Therefore, to reflect the urban environment that generates these economic and social trends, a national urban policy must incorporate these externalities. The policy statement should emphasize the effect of physical and informational proximity on growth, the benefits of efficient urban markets, and the importance of the access of workers to urban labor markets. These characteristics distinguish a national urban policy from simply a national policy targeted at people who happen to live in cities.

I Metropolitan Growth
The fiscal and social distress experienced by cities in recent years has been well documented. Yet, despite increased concern about urban crime, congestion, air quality, and high housing prices, metropolitan areas continue to grow and to offer their expanding populations greater job opportunities and higher income than the declining nonmetropolitan areas. This ability to create relatively high paying jobs attests to the advantages cities offer to firms through higher labor productivity and proximity to suppliers. The economic performance of central cities and suburbs is strongly linked. Workers in both central cities and suburbs benefit to a large extent from the growth of the entire region. In addition, job growth was markedly better for metropolitan areas with smaller disparities between central city and suburban income. The linkages between the two entities continue to strengthen as a greater percentage of holders of central city jobs reside in the suburbs. Even with these linkages, considerable disparity exists between central cities and outlying suburbs. The median income of central city residents is 40 percent lower than that of suburban residents. Also, central city residents are less educated and have a significantly higher unemployment rate than suburbanites. This exodus from central cities and the persistent economic disparities heighten the physical and intellectual barriers between central cities and suburbs.

Central cities have also experienced a shift in industrial composition from manufacturing to service jobs, which has contributed significantly to the income differential between central cities and suburbs. The decline in the percentage of manufacturing jobs has had a large effect on lowskilled workers. Factory jobs traditionally offered low-skilled workers higher wages than they could find in other jobs. Metropolitan manufacturing employment substantially impacts the employment and earnings of young men, with a high school education or less.

II. Slow Earnings Growth and Rising Income Dispersion
The traditional role of cities as a place to seek job opportunities and achieve income advancement has been eroded during the last two decades by historically low earnings growth for most groups of workers. The less skilled workers have experienced a loss in real income, and consequently a decline in their living standards. While city dwellers on average have fared better than the national average, their earnings have followed the national trend of slower earnings growth. These trends stem from a complex assortment of economic, demographic, and social forces. Many of the factors are symptomatic of urban problems. Focusing on the more important factors offers perspective on how a national urban policy might prioritize the host of problems facing urban labor markets. Many economic factors are responsible for slower productivity growth, including a decline in worker skills, lack of adequate investment in private and public capital, and decline in innovative activities. With cities traditionally at the forefront of the nation's productivity gains, the slowdown draws attention to urban concerns that may have contributed to this problem. Current urban problems of poor educational opportunities in inner cities, the movement of jobs away from the urban core, and the decline in investment in urban infrastructure may have contributed to the productivity slowdown. Urban social issues, such as low skills, lack of an adequate support structure, and lack of participation in the workforce, have also prevented many urban workers from enjoying the benefits of productivity growth. Changes in social characteristics also contributed to the change in household income. According to one study, social characteristics had an even greater effect than economic factors. Ryscavage, Green and Welniak (1991) show that the decline in married couple households as a percentage of all households and the increase in educational attainment had large offsetting effects on household income. Of seven factors considered--age, race, type of household, education, work experience and head of household, work experience of spouse, and industry of household head--type of household and education registered the largest effects.

III. Minority Earnings Gap
One of the most troubling and persistent concerns in the performance of urban labor markets, and one that a national urban policy must address, is the earnings gap.

IV. Lack of Economic Progress
For college graduates, changed occupational composition, shifts in industry demand, and growth in relative supply are major contributors. For high school dropouts, the reduction in the real minimum wage lowers earnings, and the increase in the proportion of people with criminal records are major causes of reduced employment. The fall in employment is largely accounted for by a rise in the number of men who experienced long spells of labor market inactivity, and not in more frequent spells. The increasing number of working age males who are detached from the labor force has long-run economic and social consequences. Without more frequent work experience, a growing portion of the work force loses valuable job skills, which is detrimental to the national economy in wasting valuable labor resources as well as to individuals

who lose income. They also lose the job contacts necessary to retain employment or find better job prospects. Nonparticipants in the labor market contribute to social problems. Those who are unemployed and no longer actively look for employment are much less likely to marry and live with a spouse than labor market participants.

V. Barriers to Economic Success
Urban workers benefit from metropolitan economic growth only if they have access to the urban labor market. For minorities and low-skill workers, this access is impeded by physical barriers of spatial isolation and intellectual barriers of poor education and inadequate support groups and referral networks. Therefore, in designing a national urban policy, efforts should also be made to increase access to the urban labor market. The shifting industrial mix of central cities and suburbs has left some groups of workers isolated from decent-paying jobs. The movement of manufacturing jobs to the suburbs has made it increasingly difficult for many inner city residents to finds jobs close by that offer the same wages as manufacturing jobs. Various types of service jobs have concentrated in central cities, but either the pay is lower or the skill requirements are higher than the qualifications of many residents. Physical distance is not the only barrier that prevents low-income inner city residents, from gaining access to better-paying jobs. Intellectual barriers also play a major role. Intellectual barriers prevent people from participating in the formal and informal information networks through which people learn about job opportunities, are referred to employers, and gain appropriate role models and support groups. These barriers stem in part from physical isolation, such as the increasing concentration of poverty. But they also result from a growing gap in the ability of inner city residents to meet the skill requirements of the workplace and to communicate and move comfortably within an increasingly sophisticated work environment. While distances may become effectively shorter because of better transportation, intellectual barriers may continue to grow as businesses demand higher skills than many inner city workers can match. The growing gap between skill requirements of the workplace and skills of inner city residents deters many workers from participating in urban labor markets. Without appropriate skills and workplace know-how, workers are shut out of many jobs, even entry-level ones. The spatial separation of households with different income and educational levels is more pervasive than simply between central cities and surrounding suburbs. Concentration of poverty, and thus the loss of networks of families and friends with positive work experience, has occurred within central cities. Studies have shown that low-income households have become increasing concentrated in central city neighborhoods. Unfortunately, the tremendous increase in crime in inner city neighborhoods may discourage the location of businesses, which reduces the number of jobs available to these residents.

VI. Policy Issues and Suggestions
An effective national urban policy must embody the unique characteristics of cities while addressing the trends that pervade the national economy. The distinguishing features of cities include the spatial proximity of businesses and households, the flow of information between these parties, and the linkages of markets within urban areas. Consequently, government's role and the primary purpose of a national urban policy should be to design programs that promote growth, internalize externalities, improve market efficiency, and strive for a more acceptable income distribution. The slowdown in productivity growth has resulted in two major national issues: sluggish real income growth and widening income dispersion. These trends directly affect the welfare of urban workers and indirectly alter the structure of metropolitan areas by promoting decentralization of businesses and households. Weakening the core structure of metropolitan areas may diminish the economic advantages of cities. A national urban policy

should address the underlying economic and social causes of the productivity slowdown. Increased productivity is critical to boost earnings and create additional employment opportunities. Long-term growth hinges on investment in physical and human capital. Consequently, a national urban policy should include provisions to increase the national savings rate and allocate resources to education, research and development, and a more efficient flow of technological information. Cities are the obvious place for this investment, as they offer the greatest return per dollar spent. However, in doing so, redistributing growth across metropolitan areas through favorable tax incentives or government subsidies for selected areas should be minimized.

Efficient Urban Markets
Growth policies should also focus on increasing the efficiency of urban markets. Cities provide businesses access to skilled labor, to supplier networks, to product markets, and to information. However, access has been impeded by congestion, the decentralization of employment, and deficiency in skills of some workers. Widening gaps between central cities and suburbs with respect to earnings, employment, and quality of life have also reduced the efficiency of urban markets and has impeded overall growth. In addition, inner city residents benefit from growth of the entire metropolitan economy, not only in the neighborhoods in which they live. A national urban policy should include measures to narrow these disparities through promoting the establishment of regional governments, sharing tax bases, and coordinating metropolitan provision of government services. Urban externalities can be internalized by reducing fragmentation of metropolitan area governments, which will enhance overall metropolitan growth. The benefits of the concentration of economic activities in the urban core as well as the costs of supporting social problems of urban areas can be shared throughout the metropolitan area. This would reduce the fiscal incentives to leave the inner cities and help revitalize these areas. Increase Access to Urban Labor Markets Increased economic growth benefits only those people with access to urban labor markets. A growing number of urban residents face physical and intellectual isolation from urban opportunities. Isolation deprives individuals of greater economic success and deprives the nation of potentially productive workers. It also breeds behavior that is burdensome to society, such as welfare dependency, the breakdown of support networks, the decline in traditional married-couple families, and involvement in criminal activity. A national urban policy must address the disadvantages faced by minorities in qualifying for and obtaining jobs and the disenfranchisement of low-income urban minorities. These programs should strive to get people into jobs and keep them employed. Improving the quality of education and work-related training for inner city residents will help to overcome intellectual barriers. Establishing support groups and supplying appropriate role models through mentoring and employment advocacy programs will provide access to the labor market and ensure that workers remain in the labor force. Providing more convenient and affordable public transportation to people who must commute in directions and at times not typically served by mass transit will increase access to jobs. In addition, setting up an electronic job placement system that offers information on job seekers and job vacancies for the greater metropolitan region would give inner city residents access to the broader labor market. Workers benefit from on-the-job learning and from establishing a network and support system of economically successful people, which offer opportunities for future advancement. Programs, such as wage supplements and public service employment, have proven successful in getting disadvantaged workers into the workplace and on their way to more active involvement in the labor force.

Economic Growth
Economic growth is the increase of per capita gross domestic product (GDP) or other measure of aggregate income. It is often measured as the rate of change in real GDP. Economic growth refers only to the quantity of goods and services produced. Economic growth can be either positive or negative. Negative growth can be referred to by saying that the economy is shrinking. Negative growth is associated with economic recession and economic depression. In order to compare per capita income across multiple countries, the statistics may be quoted in a single currency, based on either prevailing exchange rates or purchasing power parity. To compensate for changes in the value of money (inflation or deflation) the GDP or GNP is usually given in "real" or inflation adjusted, terms rather than the actual money figure compiled in a given year, which is called the nominal or current figure. Economists draw a distinction between short-term economic stabilization and long-term economic growth. The topic of economic growth is primarily concerned with the long run. The short-run variation of economic growth is termed the business cycle. The long-run path of economic growth is one of the central questions of economics; despite some problems of measurement, an increase in GDP of a country is generally taken as an increase in the standard of living of its inhabitants. Over long periods of time, even small rates of annual growth can have large effects through compounding (see exponential growth). A growth rate of 2.5% per annum will lead to a doubling of GDP within 29 years, whilst a growth rate of 8% per annum (experienced by some Four Asian Tigers) will lead to a doubling of GDP within 10 years. This exponential characteristic can exacerbate differences across nations. In 1377, the Arabian economic thinker Ibn Khaldun provided one of the earliest descriptions of economic growth in his Muqaddimah (known as Prolegomena in the Western world): "When civilization [population] increases, the available labor again increases. In turn, luxury again increases in correspondence with the increasing profit, and the customs and needs of luxury increase. Crafts are created to obtain luxury products. The value realized from them increases, and, as a result, profits are again multiplied in the town. Production there is thriving even more than before. And so it goes with the second and third increase. All the additional labor serves luxury and wealth, in contrast to the original labor that served the necessity of life." In the early modern period, some people in Western European nations developed the idea that economies could "grow", that is, produce a greater economic surplus which could be expended on something other than mere subsistence. This surplus could then be used for consumption, warfare, or civic and religious projects. The previous view was that only increasing either population or tax rates could generate more surplus money for the Crown or country. Later it was theorized that economic growth also corresponds to a process of continual rapid replacement and reorganization of human activities facilitated by investment motivated to maximize returns. This exponential evolution of our self-organized life-support and cultural systems is remarkably creative and flexible, but highly unpredictable in many ways. As there are difficulties in modelling complex self-organizing systems, various efforts to model the long term evolution of economies have produced mixed results. During much of the "Mercantilist" period, growth was seen as involving an increase in the total amount of specie, which is circulating medium such as silver and gold, under the control of the

state. This "Bullionist" theory led to policies to force trade through a particular state, the acquisition of colonies to supply cheaper raw materials which could then be manufactured and sold. Later, such trade policies were justified instead simply in terms of promoting domestic trade and industry. The post-Bullionist insight that it was the increasing capability of manufacturing which led to policies in the 18th century to encourage manufacturing in itself, and the formula of importing raw materials and exporting finished goods. Under this system high tariffs were erected to allow manufacturers to establish "factories". Local markets would then pay the fixed costs of capital growth, and then allow them to export abroad, undercutting the prices of manufactured goods elsewhere. Once competition from abroad was removed, prices could then be increased to recoup the costs of establishing the business. Under this theory of growth, one policy attempted to foster growth was to grant monopolies, which would give an incentive for an individual to exploit a market or resource, confident that he would make all of the profits when all other extra-national competitors were driven out of business. The "Dutch East India company" and the "British East India company" were examples of such state-granted trade monopolies. In this period the view was that growth was gained through "advantageous" trade in which specie would flow in to the country, but to trade with other nations on equal terms was disadvantageous. It should be stressed that Mercantilism was not simply a matter of restricting trade. Within a country, it often meant breaking down trade barriers, building new roads, and abolishing local toll booths, all of which expanded markets. This corresponded to the centralization of power in the hands of the Crown (or "Absolutism"). This process helped produce the modern nation-state in Western Europe. Internationally, Mercantilism led to a contradiction: growth was gained through trade, but to trade with other nations on equal terms was disadvantageous.

Classical growth theory
The modern conception of economic growth began with the critique of Mercantilism, especially by the physiocrats and with the Scottish Enlightenment thinkers such as David Hume and Adam Smith, and the foundation of the discipline of modern political economy. The theory of the physiocrats was that productive capacity, itself, allowed for growth, and the improving and increasing capital to allow that capacity was "the wealth of nations". Whereas they stressed the importance of agriculture and saw urban industry as "sterile", Smith extended the notion that manufacturing was central to the entire economy. David Ricardo argued that trade was a benefit to a country, because if one could buy a good more cheaply from abroad, it meant that there was more profitable work to be done here. This theory of "comparative advantage" would be the central basis for arguments in favor of free trade as an essential component of growth.

Many economists view entrepreneurship as having a major influence on a society's rate of technological progress and thus economic growth.[5] Joseph Schumpeter was a key figure in understanding the influence of entrepreneurs on technological progress.[5] In Schumpeter's Capitalism, Socialism and Democracy, published in 1942, an entrepreneur is a person who is willing and able to convert a new idea or invention into a successful innovation.

Entrepreneurship forces "creative destruction" across markets and industries, simultaneously creating new products and business models. In this way, creative destruction is largely responsible for the dynamism of industries and long-run economic growth. Former Federal Reserve chairman Alan Greenspan has described the influence of creative destruction on economic growth as follows: "Capitalism expands wealth primarily through creative destruction—the process by which the cash flow from obsolescent, low-return capital is invested in high-return, cutting-edge technologies." The neo-classical growth model The notion of growth as increased stocks of capital goods (means of production) was codified as the Solow-Swan Growth Model, which involved a series of equations which showed the relationship between labor-time, capital goods, output, and investment. According to this view, the role of technological change became crucial, even more important than the accumulation of capital. This model, developed by Robert Solow[7] and Trevor Swan[8] in the 1950s, was the first attempt to model long-run growth analytically. This model assumes that countries use their resources efficiently and that there are diminishing returns to capital and labor increases. From these two premises, the neoclassical model makes three important predictions. First, increasing capital relative to labor creates economic growth, since people can be more productive given more capital. Second, poor countries with less capital per person will grow faster because each investment in capital will produce a higher return than rich countries with ample capital. Third, because of diminishing returns to capital, economies will eventually reach a point at which no new increase in capital will create economic growth. This point is called a "steady state". The model also notes that countries can overcome this steady state and continue growing by inventing new technology. In the long run, output per capita depends on the rate of saving, but the rate of output growth should be equal for any saving rate. In this model, the process by which countries continue growing despite the diminishing returns is "exogenous" and represents the creation of new technology that allows production with fewer resources. Technology improves, the steady state level of capital increases, and the country invests and grows. The data does not support some of this model's predictions, in particular, that all countries grow at the same rate in the long run, or that poorer countries should grow faster until they reach their steady state. Also, the data suggests the world has slowly increased its rate of growth. However modern economic research shows that the baseline version of the neoclassical model of economic growth is not supported by the evidence. Calculations made by Solow claimed that the majority of economic growth was due to technological progress rather than inputs of capital and labour. Recent economic research has, however, found the calculations made to support this claim to be invalid as they do not take into account changes in both investment and labour inputs. Dale Jorgenson, of Harvard University, President of the American Economic Association in 2000, concludes that: ‗Griliches and I showed that changes in the quality of capital and labor inputs and the quality of investment goods explained most of the Solow residual. We estimated that capital and labor inputs accounted for 85 percent of growth during the period 1945–1965, while only 15 percent could be attributed to productivity growth… This has precipitated the sudden obsolescence of earlier productivity research employing the conventions of Kuznets and Solow.‘ Taking the G7 economies and the largest non-G7 economies, Jorgenson and Vu conclude: ‗the growth of world output between input growth and productivity… input growth greatly predominated… Productivity growth accounted for only one-fifth of the total during 1989-1995, while input growth accounted for almost four-fifths. Similarly, input growth accounted for more than 70 percent of growth after 1995, while productivity accounted for less than 30 percent.‘

Regarding differences in output per capita Jorgenson and Vu conclude: ‗differences in per capita output levels are primarily explained by differences in per capital input, rather than variations in productivity.‘

Development economics
The latter half of the 20th century, with its global economy of a few very wealthy nations and many very poor nations, led to the study of how the transition from subsistence and resourcebased economies to production and consumption based-economies occurred. This led to the field of development economics, including the work of Nobel laureates Amartya Sen and Joseph Stiglitz. However this model of economic development does not meet the demands of subaltern populations and has been severely criticized by later theorists.

New Growth Theory
Growth theory advanced again with the theories of economist Paul Romer in the late 1980s and early 1990s. Other important new growth theorists include Robert E. Lucas and Robert J. Barro. Unsatisfied with Solow's explanation, economists worked to "endogenize" technology in the 1980s. They developed the endogenous growth theory that includes a mathematical explanation of technological advancement. This model also incorporated a new concept of human capital, the skills and knowledge that make workers productive. Unlike physical capital, human capital has increasing rates of return. Therefore, overall there are constant returns to capital, and economies never reach a steady state. Growth does not slow as capital accumulates, but the rate of growth depends on the types of capital a country invests in. Research done in this area has focused on what increases human capital (e.g. education) or technological change (e.g. innovation). Recent empirical analyses suggest that differences in cognitive abilities, related to schooling and other factors, can largely explain variations in growth rates across countries. Cognitive abilities comprise intelligence and knowledge and are more important than education itself. Cognitive abilities are more relevant than the classical growth factor "economic freedom". In comparison of low, mean and high ability groups within societies the competence level of the high ability group is the most important, stimulating through research and innovation economic growth and other favorable aspects of countries like democracy. Other theories Theories of economic growth, the mechanisms that let it take place and its main determinants abound. One popular theory in the 1970s for example was that of the "Big Push" which suggested that countries needed to jump from one stage of development to another through a virtuous cycle in which large investments in infrastructure and education coupled to private investment would move the economy to a more productive stage, breaking free from economic paradigms appropriate to a lower productivity stage.[16] Analysis of recent economies' success shows a close correlation between growth and climate. It is possible that there is absolutely no actual mechanism between the two, and the relation may be spurious. In early human history, economic as well as cultural development was concentrated in warmer parts of the world, like Egypt. According to Acemoğlu, Johnson and Robinson, the positive correlation between high income and cold climate is a by-product of history. Europeans adopted very different colonization policies in different colonies, with different associated institutions. In places where these

colonizers faced high mortality rates (e.g., due to the presence of tropical diseases), they could not settle permanently, and they were thus more likely to establish extractive institutions, which persisted after independence; in places where they could settle permanently (e.g., those with temperate climates), they established institutions with this objective in mind and modeled them after those in their European homelands. In these 'neo-Europes' better institutions in turn produced better development outcomes. Thus, although other economists focus on the identity or type of legal system of the colonizers to explain institutions, these authors look at the environmental conditions in the colonies to explain institutions. For instance, former colonies have inherited corrupt governments and geo-political boundaries (set by the colonizers) that are not properly placed regarding the geographical locations of different ethnic groups, creating internal disputes and conflicts which in turn hinder development. In another example, societies that emerged in colonies without solid native populations established better property rights and incentives for long-term investment than those where native populations were large. Substantial academic literature and government strategies support the finance-led growth hypothesis, based on an observation first made almost a century ago by Joseph Schumpeter that financial markets significantly boost real economic growth and development. Schumpeter asserted that finance had a positive impact on economic growth as a result of its effects on productivity growth and technological change. (Schumpeter, Joseph A. ―The theory of Economic Development‖, 1912, translated by Redvers Opie. Cambridge. MA: Harvard University Press, 1934). As early as 1989 the World Bank also endorsed the view that financial deepening matters for economic growth ―by improving the productivity of investment (World Bank, World Development Report, Washington DC, 1989, 9. 30). A number of case studies on Asia and Southern African countries show the positive nexus between development of financial intermediation and economic growth.

Positive Effects Of Economic Growth
Income distribution Economist Xavier Sala-i-Martin argues that global income inequality is diminishing, and the World Bank argues that the rapid reduction in global poverty is in large part due to economic growth. The decline in poverty has been the slowest where growth performance has been the worst (i.e. in Africa). Quality of life Happiness has been shown to increase with a higher GDP per capita, at least up to a level of $15,000 per person. Resource depletion Many earlier predictions of resource depletion, such as Thomas Malthus' 1798 predictions about approaching famines in Europe, The Population Bomb (1968), Limits to Growth (1972), and the Simon–Ehrlich wager (1980) have proven false, one reason being that advancements in technology and science have continually allowed previously unavailable resources to be utilized more economically. Economists theorize that economies are driven by new technology and ongoing improvements in efficiency. In the book The Economic Growth Engine: How useful work creates material prosperity, 2009 Robert U. Ayres and Benjamin Warr present time series of the efficiency of primary energy (exergy) conversion into useful work for the US, UK, Austria and Japan revealing dramatic improvements Ayres and Warr, 2009. With useful work as a factor of

production they are able to reproduce historical rates of economic growth with considerable precision and without recourse to exogenous and unexplained technological progress, thereby overcoming the major flaw of the Solow Theory of economic growth. With regards ICT, we have faster computers today than a year ago, but not necessarily computers requiring more natural resources to build. Also, physical limits may be very large if considering all the minerals in the planet Earth or all possible resources from space colonization, such as solar power satellites, asteroid mining, or a Dyson sphere. The book Mining the Sky: Untold Riches from the Asteroids, Comets, and Planets provides an alternative example of such arguments. However, depletion and declining production from old resources can sometimes occur before new resources are ready to replace them. This is, in part, the logical basis of the Peak Oil theory. Although individual oil wells and mines for other nonrenewable resources are often depleted, the availability of these resources has generally risen and their prices have dropped over the long-run.

Environmental impact
Those more optimistic about the environmental impacts of growth believe that, although localized environmental effects may occur, large scale ecological effects are minor. The argument as stated by commentators Julian Lincoln Simon states that if these global-scale ecological effects exist, human ingenuity will find ways of adapting to them. Negative effects of economic growth A number of critical arguments have been raised against economic growth. Growth 'to a point' It may be that economic growth improves the quality of life up to a point, after which it doesn't improve the quality of life, but rather obstructs sustainable living. Historically, sustained growth has reached its limits (and turned to catastrophic decline) when perturbations to the environmental system last long enough to destabilise the bases of a culture. Consumerism Growth may lead to consumerism by encouraging the creation of what some regard as artificial needs: Industries cause consumers to develop new taste, and preferences for growth to occur. Consequently, "wants are created, and consumers have become the servants, instead of the masters, of the economy." Environmental impact The 2007 United Nations GEO-4 report states that humans are living beyond their means. Humanity‘s environmental demand is purported to be 21.9 hectares per person while the Earth‘s biological capacity is purported to be 15.7 ha/person. This report reinstates the basic arguments and observations made by Thomas Malthus in the early 19th century. Economic inequality has increased; the gap between the poorest and richest countries in the world has been growing. Some critics argue that a narrow view of economic growth, combined with globalization, is creating a scenario where we could see a systemic collapse of our planet's natural resources. Other critics draw on archaeology to cite examples of cultures they claim have disappeared because they grew beyond the ability of their ecosystems to support them.[34] Concerns about possible negative effects of growth on the environment and society led some to advocate lower

levels of growth, from which comes the ideas of uneconomic growth and de-growth, and Green parties which argue that economies are part of a global society and a global ecology and cannot outstrip their natural growth without damaging them. Canadian scientist, David Suzuki stated in the 1990s that ecologies can only sustain typically about 1.5-3% new growth per year, and thus any requirement for greater returns from agriculture or forestry will necessarily cannibalize the natural capital of soil or forest. Some think this argument can be applied even to more developed economies. Equitable growth While acknowledging the central role economic growth can potentially play in human development, poverty reduction and the achievement of the Millennium Development Goals, it is becoming widely understood amongst the development community that special efforts must be made to ensure poorer sections of society are able to participate in economic growth. For instance, with low inequality a country with a growth rate of 2% per head and 40% of its population living in poverty, can halve poverty in ten years, but a country with high inequality would take nearly 60 years to achieve the same reduction.[36] In the words of the Secretary General of the United Nations Ban Ki-Moon: "While economic growth is necessary, it is not sufficient for progress on reducing poverty." Researchers at the Overseas Development Institute compares situations such as in Uganda, where during a period of annual growth of 2.5% between 2000 and 2003, the percentage of people living in poverty actually increased by 3.8%. The ODI thus emphasizes the need to ensure social protection is extended to allow universal access and that policies are introduced to encourage the private sector to create new jobs as the economy grows (as opposed to jobless growth) and seek to employ people from disadvantaged groups. Implications of global warming Up to the present there are close correlations of economic growth with carbon dioxide emissions across nations, although there is also a considerable divergence in carbon intensity (carbon emissions per GDP). The Stern Review notes that the prediction that "under business as usual, global emissions will be sufficient to propel greenhouse-gas concentrations to over 550ppm CO2e by 2050 and over 650-700ppm by the end of this century is robust to a wide range of changes in model assumptions". The scientific consensus is that planetary ecosystem functioning without incurring dangerous risks requires stabilization at 450-550ppm. As a consequence, growth oriented environmental economists propose massive government intervention into switching sources of energy production, favouring wind, solar, hydroelectric and nuclear. This would largely confine use of fossil fuels to either domestic cooking needs (such as for kerosene burners) or where carbon capture and storage technology can be costeffective and reliable. The Stern Review, published by the United Kingdom Government in 2006, concluded that an investment of 1% of GDP per annum would be sufficient to avoid the worst effects of climate change, and that failure to do so could risk global GDP being 20% lower than it otherwise might be. Because carbon capture and storage is as yet widely unproven, and its long term effectiveness (such as in containing carbon dioxide 'leaks') unknown, and because of current costs of alternative fuels these policy responses largely rest on faith on technological change.


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On the other hand, Nigel Lawson claimed that people in a hundred years' time would be "seven times as well off as we are today", therefore it is not reasonable to impose sacrifices on the "much poorer present generation". Indian Economy: The economy of India is the eleventh largest economy in the world by nominal GDP and the fourth largest by purchasing power parity (PPP). Following strong economic reforms from the socialist inspired economy of a post-independence Indian nation, the country began to develop a fast-paced economic growth, as free market principles were initiated in 1990 for international competition and foreign investment. India is an emerging economic power with a very large pool of human and natural resources, and a growing large pool of skilled professionals. According to the book 'Contours of the World Economy, 1-2030AD' by Angus Maddison, India was the largest economy from the year 1 AD until the colonial period whereupon it was taken over by other countries such as China and the U.K. Economists predict that by 2020, India will be among the leading economies of the world. According to the BRIC report, published by Goldman Sachs, India will be the second largest economy after China by 2043. India was under social democratic-based policies from 1947 to 1991. The economy was characterised by extensive regulation, protectionism, public ownership, pervasive corruption and slow growth. Since 1991, continuing economic liberalisation has moved the country toward a market-based economy. A revival of economic reforms and better economic policy in first decade of the 21st century accelerated India's economic growth rate. In recent years, Indian cities have continued to liberalize business regulations. By 2008, India had established itself as the world's second-fastest growing major economy. However, the year 2009 saw a significant slowdown in India's GDP growth rate to 6.8% as well as the return of a large projected fiscal deficit of 6.8% of GDP which would be among the highest in the world. India's large service industry accounts for 55% of the country's Gross Domestic Product (GDP) while the industrial and agricultural sector contribute 28% and 17% respectively. Agriculture is the predominant occupation in India, accounting for about 52% of employment. The service sector makes up a further 34%, and industrial sector around 14%. The labour force totals half a billion workers. Major agricultural products include rice, wheat, oilseed, cotton, jute, tea, sugarcane, potatoes, cattle, water buffalo, sheep, goats, poultry and fish. Major industries include telecommunications, textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, information technology enabled services and pharmaceuticals. India's per capita income (nominal) is $1,030, ranked 139th in the world, while its per capita (PPP) of US$2,940 is ranked 128th. Previously a closed economy, India's trade has grown fast. India currently accounts for 1.5% of World trade as of 2007 according to the WTO. According to the World Trade Statistics of the WTO in 2006, India's total merchandise trade (counting exports and imports) was valued at $294 billion in 2006 and India's services trade inclusive of export and import was $143 billion. Thus, India's global economic engagement in 2006 covering both merchandise and services trade was of the order of $437 billion, up by a record 72% from a level of $253 billion in 2004. India's trade has reached a still relatively moderate share 24% of GDP in 2006, up from 6% in 1985. India's economic history can be broadly divided into three eras, beginning with the pre-colonial period lasting up to the 18th century. The advent of British colonisation started the colonial period in the early 19th century, which ended with independence in 1947. The third period stretches from independence in 1947 until now.

Pre-colonial The citizens of the Indus Valley civilisation, a permanent settlement that flourished between 2800 BC and 1800 BC, practiced agriculture, domesticated animals, used uniform weights and measures, made tools and weapons, and traded with other cities. Evidence of well planned streets, a drainage system and water supply reveals their knowledge of urban planning, which included the world's first urban sanitation systems and the existence of a form of municipal government. The 1872 census revealed that 99.3% of the population of the region constituting present-day India resided in villages, whose economies were largely isolated and self-sustaining, with agriculture the predominant occupation. This satisfied the food requirements of the village and provided raw materials for hand-based industries, such as textiles, food processing and crafts. Although many kingdoms and rulers issued coins, barter was prevalent. Villages paid a portion of their agricultural produce as revenue to the rulers, while its craftsmen received a part of the crops at harvest time for their services. Religion, especially Hinduism, and the caste and the joint family systems, played an influential role in shaping economic activities.[33] The caste system functioned much like medieval European guilds, ensuring the division of labour, providing for the training of apprentices and, in some cases, allowing manufacturers to achieve narrow specialization. For instance, in certain regions, producing each variety of cloth was the specialty of a particular sub-caste. Textiles such as muslin, Calicos, shawls, and agricultural products such as pepper, cinnamon, opium and indigo were exported to Europe, the Middle East and South East Asia in return for gold and silver. Assessment of India's pre-colonial economy is mostly qualitative, owing to the lack of quantitative information. One estimate puts the revenue of Akbar's Mughal Empire in 1600 at £17.5 million, in contrast with the total revenue of Great Britain in 1800, which totalled £16 million. India, by the time of the arrival of the British, was a largely traditional agrarian economy with a dominant subsistence sector dependent on primitive technology. It existed alongside a competitively developed network of commerce, manufacturing and credit. After the decline of the Mughals, western, central and parts of south and north India were integrated and administered by the Maratha Empire. The Maratha Empire's budget in 1740s, at its peak, was 100 million. After the loss at Panipat, the Maratha Empire disintegrated into confederate states of Gwalior, Baroda, Indore, Jhansi, Nagpur, Pune and Kolhapur. Gwalior state had a budget of 30 million. However, at this time, British East India company entered the Indian political theatre. Until 1857, when India was firmly under the British crown, the country remained in a state of political instability due to internecine wars and conflicts Colonial An aerial view of Calcutta Port taken in 1945. Calcutta, which was the economic hub of British India, saw increased industrial activity during World War II. Company rule in India brought a major change in the taxation environment from revenue taxes to property taxes, resulting in mass impoverishment and destitution of majority of farmers and led to numerous famines. The economic policies of the British Raj effectively bankrupted India's large handicrafts industry and caused a massive drain of India's resources. Indian Nationalists employed the successful Swadeshi movement, as strategy to diminish British economic superiority by boycotting British products and the reviving the market for domestic-made products and production techniques. India had become a strong market for superior finished

European goods. This was because of vast gains made by the Industrial revolution in Europe, the effects of which was deprived to Colonial India. The Nationalists had hoped to revive the domestic industries that were badly effected by policies implemented by British Raj which had made them uncompetitive to British made goods. An estimate by Cambridge University historian Angus Maddison reveals that "India's share of the world income fell from 22.6% in 1700, comparable to Europe's share of 23.3%, to a low of 3.8% in 1952". It also created an institutional environment that, on paper, guaranteed property rights among the colonizers, encouraged free trade, and created a single currency with fixed exchange rates, standardized weights and measures, capital markets. It also established a well developed system of railways and telegraphs, a civil service that aimed to be free from political interference, a common-law and an adversarial legal system. India's colonisation by the British coincided with major changes in the world economy—industrialisation, and significant growth in production and trade. However, at the end of colonial rule, India inherited an economy that was one of the poorest in the developing world, with industrial development stalled, agriculture unable to feed a rapidly growing population, India had one of the world's lowest life expectancies, and low rates for literacy. The impact of the British rule on India's economy is a controversial topic. Leaders of the Indian independence movement, and left-nationalist economic historians have blamed colonial rule for the dismal state of India's economy in its aftermath and that financial strength required for Industrial development in Europe was derived from the wealth taken from Colonies in Asia and Africa. At the same time right-wing historians have countered that India's low economic performance was due to various sectors being in a state of growth and decline due to changes brought in by colonialism and a world that was moving towards industrialization and economic integration. Independence to 1947 Compare India (orange) with South Korea (yellow). Both started from about the same income level in 1950. The graph shows GDP per capita of South Asian economies and South Korea as a percent of the American GDP per capita. Indian economic policy after independence was influenced by the colonial experience (which was seen by Indian leaders as exploitative in nature) and by those leaders' exposure to Fabian socialism. Policy tended towards protectionism, with a strong emphasis on import substitution, industrialization, state intervention in labour and financial markets, a large public sector, business regulation, and central planning. Five-Year Plans of India resembled central planning in the Soviet Union. Steel, mining, machine tools, water, telecommunications, insurance, and electrical plants, among other industries, were effectively nationalized in the mid-1950s. Capitalism and Private enterprise did not exist before 1991. Elaborate licences, regulations and the accompanying red tape, commonly referred to as Licence Raj, were required to set up business in India between 1947 and 1990. Jawaharlal Nehru, the first prime minister, along with the statistician Prasanta Chandra Mahalanobis, carried on by Indira Gandhi formulated and oversaw economic policy. They expected favorable outcomes from this strategy, because it involved both public and private sectors and was based on direct and indirect state intervention, rather than the more extreme Soviet-style central command system. The policy of concentrating simultaneously on capitaland technology-intensive heavy industry and subsidizing manual, low-skill cottage industries was criticized by economist Milton Friedman, who thought it would waste capital and labour, and retard the development of small manufacturers. The rate from 1947–80 was derisively

referred to as the Hindu rate of growth, because of the unfavourable comparison with growth rates in other Asian countries, especially the "East Asian Tigers". The Rockefeller Foundation's research in high-yielding varieties of seeds, their introduction after 1965 and the increased use of fertilizers and irrigation are known collectively as the Green Revolution in India, which provided the increase in production needed to make India selfsufficient in food grains, thus improving agriculture in India. Famine in India, once accepted as inevitable, has not returned since independence. Since 1991 In the late 80s, the government led by Rajiv Gandhi eased restrictions on capacity expansion for incumbents, removed price controls and reduced corporate taxes. While this increased the rate of growth, it also led to high fiscal deficits and a worsening current account. The collapse of the Soviet Union, which was India's major trading partner, and the first Gulf War, which caused a spike in oil prices, caused a major balance-of-payments crisis for India, which found itself facing the prospect of defaulting on its loans. India asked for a $1.8 billion bailout loan from IMF, which in return demanded reforms. An industrial zone near Mumbai, India. In response, Prime Minister Narasimha Rao along with his finance minister and current Prime Minister of India Dr. Manmohan Singh initiated the economic liberalization of 1991. The reforms did away with the Licence Raj (investment, industrial and import licensing) and ended many public monopolies, allowing automatic approval of foreign direct investment in many sectors. Since then, the overall direction of liberalisation has remained the same, irrespective of the ruling party, although no party has tried to take on powerful lobbies such as the trade unions and farmers, or contentious issues such as reforming labour laws and reducing agricultural subsidies. Since 1990 India has a free-market economy and emerged as one of the fastestgrowing economies in the developing world; during this period, the economy has grown constantly, but with a few major setbacks. This has been accompanied by increases in life expectancy, literacy rates and food security. While the credit rating of India was hit by its nuclear tests in 1998, it has been raised to investment level in 2007 by S&P and Moody's. In 2003, Goldman Sachs predicted that India's GDP in current prices will overtake France and Italy by 2020, Germany, UK and Russia by 2025 and Japan by 2035. By 2035, it was projected to be the third largest economy of the world, behind US and China. India is often seen by most economists as a rising economic superpower and is believed to play a major role in the global economy in the 21st century. In 2009 India purchased 200 Tons of Gold for $6.7 billion from IMF as a total role reversal from 1991.

Industry and services India has one of the world's fastest growing automobile industries. Shown here is the Tata Motors' Nano, the world's cheapest car. Industry accounts for 28% of the GDP and employ 14% of the total workforce. However, about one-third of the industrial labour force is engaged in simple household manufacturing only. In absolute terms, India is 16th in the world in terms of nominal factory output.


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Economic reforms brought foreign competition, led to privatisation of certain public sector industries, opened up sectors hitherto reserved for the public sector and led to an expansion in the production of fast-moving consumer goods. Post-liberalisation, the Indian private sector, which was usually run by oligopolies of old family firms and required political connections to prosper was faced with foreign competition, including the threat of cheaper Chinese imports. It has since handled the change by squeezing costs, revamping management, focusing on designing new products and relying on low labour costs and technology. Textile manufacturing is the second largest source for employment after agriculture and accounts for 26% of manufacturing output. Ludhiana produces 90% of woolens in India and is also known as the Manchester of India. Tirupur has gained universal recognition as the leading source of hosiery, knitted garments, casual wear and sportswear. Dharavi slum in Mumbai has gained fame for leather products. Tata Motors' Nano attempts to be the world's cheapest car. India is fifteenth in services output. It provides employment to 23% of work force, and it is growing fast, growth rate 7.5% in 1991–2000 up from 4.5% in 1951–80. It has the largest share in the GDP, accounting for 55% in 2007 up from 15% in 1950. Business services (information technology, information technology enabled services, business process outsourcing) are among the fastest growing sectors contributing to one third of the total output of services in 2000. The growth in the IT sector is attributed to increased specialization, and an availability of a large pool of low cost, but highly skilled, educated and fluent Englishspeaking workers, on the supply side, matched on the demand side by an increased demand from foreign consumers interested in India's service exports, or those looking to outsource their operations. The share of India's IT industry to the country's GDP increased from 4.8 % in 200506 to 7% in 2008. In 2009, seven Indian firms were listed among the top 15 technology outsourcing companies in the world. In March 2009, annual revenues from outsourcing operations in India amounted to US$60 billion and this is expected to increase to US$225 billion by 2020. Organized retail such supermarkets accounts for 24% of the market as of 2008. Regulations prevent most foreign investment in retailing. Moreover, over thirty regulations such as "signboard licences" and "anti-hoarding measures" may have to be complied before a store can open doors. There are taxes for moving goods to states, from states, and even within states. Tourism in India is relatively undeveloped, but growing at double digits. Some hospitals woo medical tourism.

Farmers work inside a rice field in Andhra Pradesh. India is the second largest producer of rice in the world after China and Andhra Pradesh is the 2nd largest rice producing state in India with West Bengal being the largest. India ranks second worldwide in farm output. Agriculture and allied sectors like forestry, logging and fishing accounted for 17% of the GDP in 2009, employed 52% of the total workforce and despite a steady decline of its share in the GDP, is still the largest economic sector and plays a significant role in the overall socio-economic development of India. Yields per unit area of all crops have grown since 1950, due to the special emphasis placed on agriculture in the five-year plans and steady improvements in irrigation, technology, application of modern agricultural practices and provision of agricultural credit and subsidies since Green revolution in India. However, international comparisons reveal the average yield in India is generally 30% to 50% of the highest average yield in the world.

Paddy fields at Kanyakumari district in Tamil Nadu India is the largest producer in the world of milk, cashew nuts, coconuts, tea, ginger, turmeric and black pepper. It also has the world's largest cattle population: 193 million. It is the second largest producer of wheat, rice, sugar, cotton, silk, peanuts and inland fish. It is the third largest producer of tobacco. India is the largest fruit producer, accounting for 10% of the world fruit production. It is the leading producer of bananas, sapotas and mangoes. India is the second largest producer and the largest consumer of silk in the world, with the majority of the 77 million kg (2005) production taking place in Karnataka State, particularly in Mysore and the North Bangalore regions of Muddenahalli, Kanivenarayanapura, and Doddaballapura, the upcoming sites of a INR 700 million "Silk City". Banking and finance The Indian money market is classified into: the organised sector (comprising private, public and foreign owned commercial banks and cooperative banks, together known as scheduled banks); and the unorganised sector (comprising individual or family owned indigenous bankers or money lenders and non-banking financial companies (NBFCs)). The unorganised sector and microcredit are still preferred over traditional banks in rural and sub-urban areas, especially for non-productive purposes, like ceremonies and short duration loans. Mumbai is the financial and commercial capital of India. Shown here is the World Trade Centre of Mumbai Prime Minister Indira Gandhi nationalised 14 banks in 1969, followed by six others in 1980, and made it mandatory for banks to provide 40% of their net credit to priority sectors like agriculture, small-scale industry, retail trade, small businesses, etc. to ensure that the banks fulfill their social and developmental goals. Since then, the number of bank branches has increased from 10,120 in 1969 to 98,910 in 2003 and the population covered by a branch decreased from 63,800 to 15,000 during the same period. The total deposits increased 32.6 times between 1971 to 1991 compared to 7 times between 1951 to 1971. Despite an increase of rural branches, from 1,860 or 22% of the total number of branches in 1969 to 32,270 or 48%, only 32,270 out of 5 lakh (500,000) villages are covered by a scheduled bank. The public sector banks hold over 75% of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively. Since liberalisation, the government has approved significant banking reforms. While some of these relate to nationalised banks (like encouraging mergers, reducing government interference and increasing profitability and competitiveness), other reforms have opened up the banking and insurance sectors to private and foreign players. More than half of personal savings are invested in physical assets such as land, houses, cattle, and gold. Indian has the highest saving rate in the world at 36 percent. Natural resources India has the world's fifth largest wind power industry, with an installed wind power capacity of 9,587 MW. Shown here is a wind farm in Muppandal, Tamil Nadu. India's total cultivable area is 1,269,219 km² (56.78% of total land area), which is decreasing due to constant pressure from an ever growing population and increased urbanisation. India has a total water surface area of 314,400 km² and receives an average annual rainfall of 1,100 mm.

Irrigation accounts for 92% of the water utilisation, and comprised 380 km² in 1974, and is expected to rise to 1,050 km² by 2025, with the balance accounted for by industrial and domestic consumers. India's inland water resources comprising rivers, canals, ponds and lakes and marine resources comprising the east and west coasts of the Indian ocean and other gulfs and bays provide employment to nearly 6 million people in the fisheries sector. In 2008, India had the world's third largest fishing industry.[88] India's major mineral resources include coal, iron, manganese, mica, bauxite, titanium, chromite, limestone and thorium. India meets most of its domestic energy demand through its 92 billion tonnes of coal reserves (about 10% of world's coal reserves).[89] India's huge thorium reserves — about 25% of world's reserves — is expected to fuel the country's ambitious nuclear energy program in the long-run. India's dwindling uranium reserves stagnated the growth of nuclear energy in the country for many years.[90] However, the Indo-US nuclear deal has paved the way for India to import uranium from other countries.[91] India is also believed to be rich in certain renewable sources of energy with significant future potential such as solar, wind and biofuels (jatropha, sugarcane).

Petroleum and Natural gas
ONGC platform at Mumbai High in the Arabian Sea. As of 2010, India is the world's fifth largest consumer of oil. India's oil reserves, found in Mumbai High, parts of Gujarat, Rajasthan and eastern Assam, meet 25% of the country's domestic oil demand. India's total proven oil reserves stand at 11 billion barrels, of which Mumbai High is believed to hold 6.1 billion barrels and Mangala Area in Rajasthan an additional 3.6 billion barrels. In 2009, India imported 2.56 million barrels of oil per day, making it one of largest buyers of crude oil in the world. The petroleum industry in India mostly consists of public sector companies such as Oil and Natural Gas Corporation (ONGC), Hindustan Petroleum Corporation Limited (HPCL) and Indian Oil Corporation Limited (IOCL). There are some major private Indian companies in oil sector such as Reliance Industries Limited (RIL) which operates the world's largest oil refining complex.

India has a self reliant Pharmaceuticals industry. The majority of its medical consumables are produced domestically. Pharmaceutical Industry in India is dotted with companies like Ranbaxy Pharmaceutical, Dr. Reddy's Laboratories, Cipla which have created a niche for themselves at world level. India including China, Brazil, Turkey, Mexico, Russia and South Korea are called ―pharmerging‖ countries. Today, India is an exporter to countries like the United States and Russia. In terms of the global market, India currently holds a modest 1-2% share, but it has been growing at approximately 10% per year. India is unable to capture much of the value as most of the innovation taking place is by non-Indian firms. They are developing products in their own R&D centres or outsourcing to Indian engineering services firms and getting the stuff manufactured at either their own factories or through contract manufacturing, as in pharmaceuticals.


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Global trade relations In March 2008, India's annual imports and exports stood at US$236 and US$155.5 billion respectively. Shown here is the cargo of a container ship being unloaded at the Jawaharlal Nehru Port, Navi Mumbai. India's economy is mostly dependent on its large internal market with external trade accounting for just 20% of the country's GDP. In 2008, India accounted for 1.45% of global merchandise trade and 2.8% of global commercial services export. Until the liberalization of 1991, India was largely and intentionally isolated from the world markets, to protect its economy and to achieve self-reliance. Foreign trade was subject to import tariffs, export taxes and quantitative restrictions, while foreign direct investment (FDI) was restricted by upper-limit equity participation, restrictions on technology transfer, export obligations and government approvals; these approvals were needed for nearly 60% of new FDI in the industrial sector. The restrictions ensured that FDI averaged only around US$200 million annually between 1985 and 1991; a large percentage of the capital flows consisted of foreign aid, commercial borrowing and deposits of non-resident Indians. India's exports were stagnant for the first 15 years after independence, due to the predominance of tea, jute and cotton manufactures, demand for which was generally inelastic. Imports in the same period consisted predominantly of machinery, equipment and raw materials, due to nascent industrialization. Since liberalization, the value of India's international trade has become more broad-based and has risen to 63,080,109 crores in 2003–04 from 1,250 crores in 1950–51. India's major trading partners are China, the US, the UAE, the UK, Japan and the EU. The exports during April 2007 were $12.31 billion up by 16% and import were $17.68 billion with an increase of 18.06% over the previous year. In 2006-07, major export commodities included engineering goods, petroleum products, chemicals and pharmaceuticals, gems and jewellery, textiles and garments, agricultural products, iron ore and other minerals. Major import commodities included crude oil and related products, machinery, electronic goods, gold and silver. India is a founding-member of General Agreement on Tariffs and Trade (GATT) since 1947 and its successor, the WTO. While participating actively in its general council meetings, India has been crucial in voicing the concerns of the developing world. For instance, India has continued its opposition to the inclusion of such matters as labour and environment issues and other nontariff barriers into the WTO policies.

Balance of payments
Cumulative Current Account Balance 1980-2008 based on the IMF data Since independence, India's balance of payments on its current account has been negative. Since liberalisation in the 1990s (precipitated by a balance of payment crisis), India's exports have been consistently rising, covering 80.3% of its imports in 2002–03, up from 66.2% in 1990–91. India's growing oil import bill is seen as the main driver behind the large current account deficit. In 2007-08, India imported 120.1 million tonnes of crude oil, more than 3/4th of the domestic demand, at a cost of $61.72 billion. Although India is still a net importer, since 1996–97 its overall balance of payments (i.e., including the capital account balance) has been positive, largely on account of increased foreign direct investment and deposits from non-resident Indians; until this time, the overall balance

was only occasionally positive on account of external assistance and commercial borrowings. As a result, India's foreign currency reserves stood at $285 billion in 2008. Due to the global late-2000s recession, both Indian exports and imports declined by 29.2% and 39.2% respectively in June 2009. The steep decline was because countries hit hardest by the global recession, such as United States and members of the European Union, account for more than 60% of Indian exports. However, since the decline in imports was much sharper compared to the decline in exports, India's trade deficit reduced to 252.5 billion rupee. India's reliance on external assistance and commercial borrowings has decreased since 1991– 92, and since 2002–03, it has gradually been repaying these debts. Declining interest rates and reduced borrowings decreased India's debt service ratio to 4.5% in 2007. In India, External Commercial Borrowings (ECBs) are being permitted by the Government for providing an additional source of funds to Indian corporates. The Ministry of Finance monitors and regulates these borrowings (ECBs) through ECB policy guidelines. Foreign direct investment in India As the fourth-largest economy in the world in PPP terms, India is a preferred destination for foreign direct investments (FDI); India has strengths in telecommunication, information technology and other significant areas such as auto components, chemicals, apparels, pharmaceuticals, and jewellery. Despite a surge in foreign investments, rigid FDI policies resulted in a significant hindrance. However, due to some positive economic reforms aimed at deregulating the economy and stimulating foreign investment, India has positioned itself as one of the front-runners of the rapidly growing Asia Pacific Region. India has a large pool of skilled managerial and technical expertise. The size of the middle-class population stands at 300 million and represents a growing consumer market. The inordinately high investment from Mauritius is due to routing of international funds through the country given significant capital gains tax advantages; double taxation is avoided due to a tax treaty between India and Mauritius, and Mauriitus is a capital gains tax haven, effectively creating a zero-taxation FDI channel. India's recently liberalized FDI policy (2005) allows up to a 100% FDI stake in ventures. Industrial policy reforms have substantially reduced industrial licensing requirements, removed restrictions on expansion and facilitated easy access to foreign technology and foreign direct investment FDI. The upward moving growth curve of the real-estate sector owes some credit to a booming economy and liberalized FDI regime. In March 2005, the government amended the rules to allow 100 per cent FDI in the construction business. This automatic route has been permitted in townships, housing, built-up infrastructure and construction development projects including housing, commercial premises, hotels, resorts, hospitals, educational institutions, recreational facilities, and city- and regional-level infrastructure. A number of changes were approved on the FDI policy to remove the caps in most sectors. Fields which require relaxation in FDI restrictions include civil aviation, construction development, industrial parks, petroleum and natural gas, commodity exchanges, creditinformation services and mining. But this still leaves an unfinished agenda of permitting greater foreign investment in politically sensitive areas such as insurance and retailing. FDI inflows into India reached a record $19.5 billion in fiscal year 2006-07 (April–March), according to the government's Secretariat for Industrial Assistance. This was more than double the total of US$7.8bn in the previous fiscal year. The FDI inflow for 2007-08 has been reported as $24 billion and for 2008-09, it is expected to be above $35 billion. A critical factor in determining India's continued economic growth and realizing the potential to be an economic superpower is

going to depend on how the government can create incentives for FDI flow across a large number of sectors in India. Currency The RBI headquarters in Mumbai The Indian rupee is the only legal tender accepted in India. The exchange rate as on 23 March 2010 is 45.40 INR the USD, 61.45 to a EUR, and 68.19 to a GBP. The Indian rupee is accepted as legal tender in the neighboring Nepal and Bhutan, both of which peg their currency to that of the Indian rupee. The rupee is divided into 100 paise. The highest-denomination banknote is the 1,000 rupee note; the lowest-denomination coin in circulation is the 25 paise coin (it earlier had 1, 2, 5, 10 and 20 paise coins which have been discontinued by the Reserve Bank of India). The Rupee hit a record low during early 2009 on account of global recession. However, due to a strong domestic market, India managed to bounce back sooner than the western countries. Since September 2009 there has been a constant appreciation in Rupee versus most Tier 1 currencies. On 11 January 2010 Rupee went as high as 45.50 to a United states dollar and on 10 January 2010 as high as Rupee 73.93 to a British Pound. A rising rupee also prompted Government of India to buy 200 tonnes of Gold from IMF. The RBI, the country's central bank was established on 1 April 1935. It serves as the nation's monetary authority, regulator and supervisor of the financial system, manager of exchange control and as an issuer of currency. The RBI is governed by a central board, headed by a governor who is appointed by the Central government of India. Income and consumption Percentage of population living under the poverty line of $1 (PPP) a day, currently 356.35 rupees a month in rural areas (around $7.4 a month). As of 2005:

85.7% of the population lives on less than $2.50 (PPP) a day, down from 92.5% in 1981. This is much higher than the 80.5% in Sub-Saharan Africa. 75.6% of the population lives on less than $2 a day (PPP), which is around 20 rupees or $0.5 a day in nominal terms. It was down from 86.6%, but is still even more than the 73.0% in Sub-Saharan Africa. 24.3% of the population earned less than $1 (PPP, around $0.25 in nominal terms) a day in 2005, down from 42.1% in 1981. 41.6% of its population is living below the new international poverty line of $1.25 (PPP) per day, down from 59.8% in 1981. The World Bank further estimates that a third of the global poor now reside in India.

Housing is modest. According to Times of India, "a majority of Indians have per capita space equivalent to or less than a 10 feet x 10 feet room for their living, sleeping, cooking, washing and toilet needs." and "one in every three urban Indians lives in homes too cramped to exceed even the minimum requirements of a prison cell in the US." The average is 103 sq ft (9.6 m2) per person in rural areas and 117 sq ft (10.9 m2) per person in urban areas. Around half of Indian children are malnourished. The proportion of underweight children is nearly double that of Sub-Saharan Africa. However, India has not had famines since the Green Revolution in the early 1970s. While poverty in India has reduced significantly, official figures estimate that 27.5% of Indians still lived below the national poverty line of $1 (PPP, around 10

rupees in nominal terms) a day in 2004-2005. A 2007 report by the state-run National Commission for Enterprises in the Unorganised Sector (NCEUS) found that 65% of Indians, or 750 million people, lived on less than 20 rupees per daywith most working in "informal labour sector with no job or social security, living in abject poverty." Since the early 1950s, successive governments have implemented various schemes, under planning, to alleviate poverty, that have met with partial success. All these programmes have relied upon the strategies of the Food for work programme and National Rural Employment Programme of the 1980s, which attempted to use the unemployed to generate productive assets and build rural infrastructure. In August 2005, the Indian parliament passed the Rural Employment Guarantee Bill, the largest programme of this type in terms of cost and coverage, which promises 100 days of minimum wage employment to every rural household in all the India's 600 districts. The question of whether economic reforms have reduced poverty or not has fuelled debates without generating any clear cut answers and has also put political pressure on further economic reforms, especially those involving the downsizing of labour and cutting agricultural subsidies. Recent statistics in 2010 point out that the number of high income households has crossed lower income households.

Agricultural and allied sectors accounted for about 60% of the total workforce in 2003 same as in 1993–94. While agriculture has faced stagnation in growth, services have seen a steady growth. Of the total workforce, 8% is in the organised sector, two-thirds of which are in the public sector. The NSSO survey estimated that in 1999–2000, 106 million, nearly 10% of the population were unemployed and the overall unemployment rate was 7.3%, with rural areas doing marginally better (7.2%) than urban areas (7.7%). India's labor force is growing by 2.5% annually, but employment only at 2.3% a year. Official unemployment exceeds 9%. Regulation and other obstacles have discouraged the emergence of formal businesses and jobs. Almost 30% of workers are casual workers who work only when they are able to get jobs and remain unpaid for the rest of the time Only 10% of the workforce is in regular employment. India's labor regulations are heavy even by developing country standards and analysts have urged the government to abolish them. Unemployment in India is characterized by chronic or disguised unemployment. Government schemes that target eradication of both poverty and unemployment (which in recent decades has sent millions of poor and unskilled people into urban areas in search of livelihoods) attempt to solve the problem, by providing financial assistance for setting up businesses, skill honing, setting up public sector enterprises, reservations in governments, etc. The decreased role of the public sector after liberalization has further underlined the need for focusing on better education and has also put political pressure on further reforms. Child labor is a complex problem that is basically rooted in poverty. The Indian government is implementing the world's largest child labor elimination program, with primary education targeted for ~250 million. Numerous non-governmental and voluntary organizations are also involved. Special investigation cells have been set up in states to enforce existing laws banning employment of children (under 14) in hazardous industries. The allocation of the Government of India for the eradication of child labor was $10 million in 1995-96 and $16 million in 1996-97. The allocation for 2007 is $21 million. In 2006, remittances from Indian migrants overseas made up $27 billion or about 3% of India's GDP.


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Economic trends India's 300 million strong middle-class population is growing at an annual rate of 5%. Shown here is a residential area in Mumbai. In the revised 2007 figures, based on increased and sustaining growth, more inflows into foreign direct investment, Goldman Sachs predicts that "from 2007 to 2020, India‘s GDP per capita in US$ terms will quadruple", and that the Indian economy will surpass the United States (in US$) by 2043. In spite of the high growth rate, the report stated that India would continue to remain a low-income country for decades to come but could be a "motor for the world economy" if it fulfills its growth potential. Goldman Sachs has outlined 10 things that it needs to do in order to achieve its potential and grow 40 times by 2050. These are 1. Improve Governance 2. Raise Educational Achievement 3. Increase Quality and Quantity of Universities 4. Control Inflation 5. Introduce a Credible Fiscal Policy 6. Liberalize Financial Markets 7. Increase Trade with Neighbours 8. Increase Agricultural Productivity 9. Improve Infrastructure 10. Improve Environmental Quality.

Agriculture Slow agricultural growth is a concern for policymakers as some two-thirds of India‘s people depend on rural employment for a living. Current agricultural practices are neither economically nor environmentally sustainable and India's yields for many agricultural commodities are low. Poorly maintained irrigation systems and almost universal lack of good extension services are among the factors responsible. Farmers' access to markets is hampered by poor roads, rudimentary market infrastructure, and excessive regulation. – World Bank: "India Country Overview 2008" The low productivity in India is a result of the following factors:

 

According to "India: Priorities for Agriculture and Rural Development" by World Bank, India's large agricultural subsidies are hampering productivity-enhancing investment. Overregulation of agriculture has increased costs, price risks and uncertainty. Government interventions in labor, land, and credit markets are hurting the market. Infrastructure and services are inadequate.[150] Illiteracy, slow progress in implementing land reforms and inadequate or inefficient finance and marketing services for farm produce. The average size of land holdings is very small (less than 20,000 m²) and is subject to fragmentation, due to land ceiling acts and in some cases, family disputes. Such small holdings are often over-manned, resulting in disguised unemployment and low productivity of labour.
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Adoption of modern agricultural practices and use of technology is inadequate, hampered by ignorance of such practices, high costs and impracticality in the case of small land holdings. World Bank says that the allocation of water is inefficient, unsustainable and inequitable. The irrigation infrastructure is deteriorating. Irrigation facilities are inadequate, as revealed by the fact that only 52.6% of the land was irrigated in 2003–04, which result in farmers still being dependent on rainfall, specifically the Monsoon season. A good monsoon results in a robust growth for the economy as a whole, while a poor monsoon leads to a sluggish growth. Farm credit is regulated by NABARD, which is the statutory apex agent for rural development in the subcontinent.

India has many farm insurance companies that insure fruit, rice and rubber farmers in the event of natural disasters or catastrophic crop failure, under the supervision of the Ministry of Agriculture. One notable company that provides all of these insurance policies is Agriculture Insurance Company of India and it alone insures almost 20 million farmers. India's population is growing faster than its ability to produce rice and wheat. The most important structural reform for self-sufficiency is the ITC Limited plan to connect 20,000 villages to the Internet by 2013. This will provide farmers with up to date crop prices for the first time, which should minimise losses incurred from neighbouring producers selling early and in turn facilitate investment in rural areas. Corruption Corruption has been one of the pervasive problems affecting India. The economic reforms of 1991 reduced the red tape, bureaucracy and the Licence Raj that had strangled private enterprise and was blamed by Chakravarthi Rajagopalachari for the corruption and inefficiencies. Yet, a 2005 study by Transparency International (TI) India found that more than half of those surveyed had firsthand experience of paying bribe or peddling influence to get a job done in a public office. The Right to Information Act (2005) and equivalent acts in the Indian states, that require government officials to furnish information requested by citizens or face punitive action, computerisation of services and various central and state government acts that established vigilance commissions have considerably reduced corruption or at least have opened up avenues to redress grievances. The 2009 report by Transparency International ranks India at 84th place and states that significant improvements were made by India in reducing corruption. Government The number of people employed in non-agricultural occupations in the public and private sectors. Totals are rounded. Private sector data relates to non-agriculture establishments with 10 or more employees. The current government has concluded that most spending fails to reach its intended recipients. Lant Pritchett calls India's public sector "one of the world's top ten biggest problems — of the order of AIDS and climate change".The Economist's 2008 article about the Indian civil service stated that the Indian central government employs around 3 million people, including "vast armies of paper-shuffling peons". At local level, administration can be worse. It is not unheard of that a majority of a state's assembly seats can be held by convicted criminals. One study found that 25% of public sector

teachers and 40% of public sector medical workers could not be found at the workplace. India's absence rates are one of the worst in the world. Education India has made huge progress in terms of increasing primary education attendance rate and expanding literacy to approximately two thirds of the population. The right to education at elementary level has been made one of the fundamental rights under the Eighty-Sixth Amendment of 2002. However, the literacy rate of 65% is still lower than the worldwide average and the country suffers from a high dropout rate. Infrastructure In the past, development of infrastructure was completely in the hands of the public sector and was plagued by corruption, bureaucratic inefficiencies, urban-bias and an inability to scale investment. India's low spending on power, construction, transportation, telecommunications and real estate, at $31 billion or 6% of GDP in 2002 had prevented India from sustaining higher growth rates. This has prompted the government to partially open up infrastructure to the private sector allowing foreign investment which has helped in a sustained growth rate of close to 9% for the past six quarters. Some 600 million Indians have no means of electricity at all. While 80% of Indian villages have at least an electricity line, just 44% of rural households have access to electricity. According to a sample of 97,882 households in 2002, electricity was the main source of lighting for 53% of rural households compared to 36% in 1993. Some half of the electricity is stolen, compared with 3% in China. The stolen electricity amounts to 1.5% of GDP. Almost all of the electricity in India is produced by the public sector. Power outages are common. Many buy their own power generators to ensure electricity supply. As of 2005 the electricity production was at 661.6 billion kWh with oil production standing at 785,000 bbl/day. In 2007, electricity demand exceeded supply by 15%.Multi Commodity Exchange has tried to get a permit to offer electricity future markets. India has the world's third largest road network in the world. Container traffic is growing at 15% a year. Some 60% of India‘s container traffic is handled by the Jawaharlal Nehru Port Trust in Navi Mumbai. Internet use is rare; there were only 7.57 million broadband lines in India in November 2009, however it is still growing at slower rate and is expected to boom after the launch of 3G and wimax services. Most urban cities have good water supply water 24 hours a day, while some smaller cities face water shortages in summer season. A World Bank report says it is an institutional problem in water agencies, or "how the agency is embedded in the relationships between politics and the citizens who are the consumers." Labour laws India‘s labor regulations — among the most restrictive and complex in the world — have constrained the growth of the formal manufacturing sector where these laws have their widest application. Better designed labor regulations can attract more labor- intensive investment and create jobs for India‘s unemployed millions and those trapped in poor quality jobs. Given the country‘s momentum of growth, the window of opportunity must not be lost for improving the job prospects for the 80 million new entrants who are expected to join the work force over the next decade.– World Bank: India Country Overview 2008. India's restrictive labor regulations hamper the large-scale creation of formal industrial jobs.

India ranked 133th on the Ease of Doing Business Index 2010, behind countries such as China (89th), Pakistan (85th), and Nigeria (125th). The Constitution provides protection of child labor, slavery, equality of opportunities and forced labor etc. in form of fundamental rights, but the implementation of provisions cited is a matter of concern. Economic disparities Lagging states need to bring more jobs to their people by creating an attractive investment destination. Reforming cumbersome regulatory procedures, improving rural connectivity, establishing law and order, creating a stable platform for natural resource investment that balances business interests with social concerns, and providing rural finance are important. – World Bank: India Country Overview 2008 Slums next to high-rise commercial buildings in Kaloor, Kochi. Hundreds of people, mostly comprising migrant labourers who come to the city seeking job prospects, reside in such shabby areas. One of the critical problems facing India's economy is the sharp and growing regional variations among India's different states and territories in terms of per capita income, poverty, availability of infrastructure and socio-economic development. Six low-income states - Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa and Uttar Pradesh - are home to more than one third of India's population. Between 1999 and 2008, the annualized growth rates for Maharashtra (9%), Gujarat (8.8%), Haryana (8.7%), or Delhi (7.4%) were much higher than for Bihar (5.1%), Uttar Pradesh (4.4%), or Madhya Pradesh (3.5%). However, In 2009-10, Bihar witnessed a growth of about 12.6%, and ended up becoming the 'fastest growing state' , followed by Gujarat with a growth of 11.3%. Poverty rates in rural Orissa (43%) and rural Bihar (40%) are some of the worst in the world. On the other hand, rural Haryana (5.7%) and rural Punjab (2.4%) compare well with middle-income countriesThe five-year plans have attempted to reduce regional disparities by encouraging industrial development in the interior regions, but industries still tend to concentrate around urban areas and port cities After liberalization, the more advanced states are better placed to benefit from them, with infrastructure like well developed ports, urbanisation and an educated and skilled workforce which attract manufacturing and service sectors. The union and state governments of backward regions are trying to reduce the disparities by offering tax holidays, cheap land, etc., and focusing more on sectors like tourism, which although being geographically and historically determined, can become a source of growth and is faster to develop than other sectors.


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Housing Demand vs Housing Stock
The main determinants of the demand for housing are demographic and other factors like Income  Price of housing  Cost and availability of credit  Consumer preferences  Investor preferences  Price of substitutes  Price of compliments all play a role Core demographic variables –  Population size  Population growth The more people in the economy, the greater the demand for housing It is necessary to consider Family size  Age composition of the family  Number of first and second children  Net migration  Non-family household formation  Number of double family households  Death rates  Divorce rates  Marriages  Income is also an important determinant  Many housing economists use permanent income rather than annual income because of the high cost of purchasing real estate  For many people, real estate will be the most costly item they will ever buy Housing supply is produced using –  Land  Labour  Various inputs such as electricity and building


Demand conditions for housing influence both the willingness and ability of people to make house purchases Most important conditions of demand are – 1. Growth of real incomes - As average living standards rise, the total demand for housing expands, as does the demand for more expensive properties as people look to move "up market" 2. Consumer confidence - confidence is vital in the housing sector


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If expectations for the future performance of the economy deteriorate and people become less optimistic about their own financial circumstances, they are tempted to curtail their search for a new home or delay entry into the owner-occupied sector Equally when the economy is enjoying sustained growth and rising prosperity - improved confidence raises the number of home buyers and shifts the balance of power in the market towards the seller if properties are in short supply Jobs - financing a house purchase involves making a long-term commitment through a mortgage lender, changes in unemployment levels exert a significant impact on housing demand For eg. in areas when unemployment remains persistently above the national average, average incomes are likely to be lower and confidence among buyers will be negatively affected These three factors, incomes, employment and confidence are critical in determining the direction of house prices. When these three factors are rising the conditions are normally in place for sharp upward movements in prices However other economic variables also come into play Expectations of future price movements - housing to be regarded as a consumer durable that provides a flow of services to the owner over a long period Or should we think of a house purchase, as a major financial investment that we expect will provide us with substantial capital gains in the long run Changes to the system of housing taxes and subsidies - government policies affect the housing sector in different ways ranging from benefits for council taxpayers on low incomes to the payment of stamp duty on the most expensive properties With India's economy growing steadily, housing demand is estimated to rise to 42 lakh units during the next five years, the majority of which will be in the affordable segment  "The pan-India residential demand for the period 2010-14 is estimated to be approximately 4.25 million units, of which mid range and affordable sectors continue to capture a significant share of 70 per cent," property consultant Cushman & Wakefield (C&W) said in a report  The report noted that out of total demand, 60 per cent is expected to come from top seven cities, including national capital region and Mumbai  The demand in these cities, however, is estimated to be three times higher than supply during 2010-14  "With India's economic environment showing signs of stability and buoyant growth, coupled with improvement in affordability and access to finance, housing demand in the country is expected to witness a revival in demand in the near future," C&W India Executive Director (Investment Services) Manish Aggarwal said  "The demand for retail space across the country is estimated to be 55 million sq ft, of which the top seven cities will witness approximately 53 per cent,―  Residential demand in top cities is projected to grow nearly 17% in 2010 to 5.8 lakh units aided by strong economic growth and improved affordability, according to Cushman & Wakefield

The housing demand in these cities (30 top cities) was estimated at 4.9 lakh units during 2009

Units wanted Residential demand is seen at 6.8 lakh units in 2011 (18% growth over 2010)  8.1 lakh units in 2012 (19%)  9.8 lakh units in 2013 (near 20%)  11.8 lakh units in 2014 (about 20.6% growth) The forecast is based on parameters such as affordability, population growth, anticipated home loan disbursements, among others The 30 cities include large macro markets such as NCR, Mumbai, Bangalore, Chennai, Pune, Hyderabad and Kolkata as well as smaller cities such as Ahmedabad, Jaipur, Cochin and Nagpur The selection of cities was based on an analysis of economic activity, infrastructure development, population growth and presence of organized real estate developers ―The pan-India residential demand for the period 2010-2014 is estimated to be about 4.25 million units (cumulative), of which mid-range and affordable sectors continue to capture a significant share of 70%,― The global real estate consultant has said in its latest report Housing stock -- the total number of residential units, including mobile homes, available for non transient occupancy  A renewed focus on affordable housing is in order  There is plenty of demand out there; supply is more likely to be the constraint  The demand for housing units in the top 112 cities is expected be 10.5 million units during the next 7 years leading up to 2015  The demand for housing units in the top 112 cities is expected be 10.5 million units during the next 7 years leading up to 2015  The Housing Skyline of India estimates the demand for housing units in the top 112 cities to be 10.5 million units during the next 7 years leading up to 2015  The current stock of housing units in these cities is estimated to be 41.8 million units, which implies a growth in housing stock of over 25% within 7 years  Of these 112, the top 30 cities will account for 60% of the demand and are expected to add 6.36 million units during the next 7 years  The current stock of housing units in these 30 cities is estimated to be 25 million units  In the top 30 Cities  Households with Plinth Area Less than 500 Sq ft -10.01 %  Households with Plinth Area Between 500-1000 Sq ft -7.48 %  Households with Plinth Area More than 1000 Sq ft - 7.55 %  Demand for units (2008-2015) for Plinth Area Less than 500 Sq ft 2.14 %  Demand for units (2008-2015) for Plinth Area Between 500-1000 Sq ft 2.07 %  Demand for units (2008-2015) for Plinth Area More than 1000 Sq ft 2.15 %


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 Whereas most of the attention of the building industry is on the upper segment, it is middle and lower middle India which is driving demand  The demand for housing of size less than 1000 sq ft is 6.2 million units over 7 years, which is 2/3rd of the demand

Affordable Housing
Housing for the masses  Comfortable living  Location proximity Affordability is quantified by  Household income  Price of the product Affordability does not compromise on  Quality of construction  Provisioning of socio – economic infrastructure

Recent shift in focus towards affordable housing
Growth scenario of Indian Economy  GDP growth surpassing target rates  Decline in population below BPL line Real Estate Industry Evolution 15 years ago Unorganized sector Controlled authority development by development Now Organized sector Private sector participation Modern techniques mechanized construction

Traditional construction techniques Funding through unorganized sector Loan approval quarterly execution Property purchase at fag end of career

Multiple funding options Loan processing in a matter of days Property owners age -27 and above

Demand Supply Dynamics Short Supply of residential dwellings  Supply shortfall existing since post independence  In 2005 estimated demand is 209.5 million, supply was 189.7 Million  Demand – Supply gap is narrowing Low supply of housing for low income earnersAs per 11th 5 year plan  Shortage of 24.71 million dwellings  Close to 99 % of shortage in EWS & LIG segment

2003  Continuous increase in GDP  Increase in income levels  Lowering of home loan interest rates  Affordable property prices  High market sentiments

2007 and above  Decline in GDP growth rate  Income level stagnation/  risk of layoffs  High lending rate  Unaffordable property prices  Low market sentiments

Opportunities for Affordable Housing in India  Restructuring of the housing sector  Re-focusing product to real end user demand  Catering to strong domestic demand  Real estate as a widely linked sector  Linkages with 200 industries  Multiplier effect on growth  Growing urban population  Projected urban population to 533 million by 2025 Issues relating to Affordable Housing  Lack of regulatory mechanism  High cost of land  Stringent land acquisition process  Double taxation system – high transaction cost  Constraining density norms Suggestions  Speedy approvals of housing projects  Provisioning of additional FSI  Improving connectivity to suburbs  Rationalization of transaction cost  Non scarcity of developed land  Creation of Special Residential Zones (SRZ)  Value engineering in construction  Private Public Participation (PPP

HOUSING STOCK AND CONSTRUCTIONS (JULY – DECEMBER 2002) The National Sample Survey Organization (NSSO) in the Ministry of Statistics and Programme Implementation, Government of India, given a report on the nationwide household survey in July 2002-December 2002 on housing conditions in India A sample of 97,882 households spread over 4,769 villages and 3,538 urban blocks in the country had been surveyed to obtain information regarding the conditions of the dwellings in which the rural and urban population of the country live and the number, size, structure, cost and financing of residential constructions undertaken by the households The survey reveals that out of every 100 households in rural areas 36 lived in pucca structures

 43 lived in semi-pucca structures  21 in katcha structures In urban areas  77 in pucca structures  20 in semi-pucca structures and  only 3 in katcha structures In urban slum areas, 67% of the dwellings were pucca Rural areas of Delhi and Haryana, urban slums in Mizoram, Himachal Pradesh, Punjab and Haryana, and urban areas (excluding the slums and squatter settlements) of Sikkim, Delhi, Uttaranchal, J&K and Gujarat reported the prevalence of more pucca structures than the rest of the country The States of Tripura, Manipur and Chattisgarh were found to be well below the national average in terms of prevalence of pucca structures The floor area –  Average rural household was 38 square metres  Average urban household had 37 square metres Average household size –  Rural areas was 5.15  Urban areas 4.47. 19 out of every 100 structures in the rural areas and 11 in the urban areas were in bad condition and required immediate major repair 92% of rural households and 60% of urban households owned the dwelling units

Facilities of drinking water, latrine and electricity –  15% of the dwellings in urban slums and squatter settlements  63% of dwelling units in other urban areas  11% of the units in rural areas Had all the three facilities within their premises Other extreme, none of the three facilities were available within the premises of about –  30% of dwelling units in rural areas  11% of dwelling units in urban slums and squatter settlements  4% of dwelling units in other urban areas of the country97% of rural 99% of urban dwellings Considering both rural and urban areas together, the percentage of households lacking toilet facility in  Chhattisgarh (82%)  Orissa (80%)  Bihar (79%)  M.P. (77%)  Jharkhand (76%)

 Rajasthan (72%)  U.P. (72%) Fall in the percentage of katcha constructions in rural India from 45% to 40% and a rise in the percentage of pucca constructions from 34% to 38% In urban India, there was a fall in katcha constructions from 18% during 1989-93 to 12% during 1998-2002 and a rise in pucca constructions from 64% to 74%  Rural households financed around 66%, and urban households, 62%, of their construction costs from their own sources  In urban slums and squatter settlements, moneylenders financed 15% of all construction costs  In other urban areas, moneylenders financed only 4% of the total construction costs  In the rural areas, moneylenders financed 9% of all construction costs

 The Mono-Centric City Model If an area meets many or all of the following criteria, it would probably be considered a CBD:  Houses large public buildings such as libraries, churches, stations and town halls  Contains specialist shops and branches of major department stores  Contains social amenities such as cinema halls, clubs and theatres  Contains little housing, but often hotels  Contains little or no industry  Contains offices and other professional buildings  Contains buildings that tend to be taller than other buildings in the city (because land prices tend to be at a premium, making high-rise buildings economically favorable)  Has high pedestrian levels and the greatest parking restrictions  Often is the geographical centre of the settlement  Often is the area with the highest land value  Is well connected by public transport, with large numbers of passengers  Has high traffic levels  Puerto Madero, Buenos Aires CBD, Argentina A Mono-centric City Cities looked very different 100 years ago: ◦ Cities had a unique center ◦ Jobs were concentrated near the city center ◦ Manufacturing firms located near railroad terminals ◦ Office firms clustered in the CBD ◦ Workers lived in city center and commuted by foot or in the suburbs and rode street cars

Rise of the Mono-centric City
Innovations in production and energy increased concentration of production in cities Required some means to transport workers to factories and goods to markets Rise of the Mono-centric City Innovations in Intracity Transportation ◦ Omnibus (1827) ◦ Cable cars (1873) ◦ Electric Trolley (1886) ◦ Subways (1895) Decrease in travel cost and increase feasible radius  The Primitive Technology of Freight ◦ Intercity freight: manufacturers transported finished goods out of the city through ship or rail ◦ Intra city freight: horse-drawn wagons were used for transporting goods from the factory to port or rail terminal ◦ Tied manufacturer to the central export node: railroad terminal or port    

 The Technology of Building Construction ◦ Balloon-frame building (1832), fastened with cheap nails ◦ Office buildings: masonry to cast iron (1848, five stories) to steel (1885, 11 stories) ◦ Elevator (1854): Intra-building price curve inverted by elevator; upper floors rent at premium, not a discount Firm Transport Costs and Rents  Transport costs decrease with proximity to city center  Zero Profit Condition implies: ◦ rents increase as transport costs decrease ◦ downward sloping bid rent function Most central firm type: offices?  Office firms require: ◦ meetings and face to face contact ◦ ability to gather, process and distribute information quickly ◦ access to services, like printing, lawyers, designers, accountants, etc. ◦ travel cost of individuals is very high due to high pay rate (skilled work)  Implies steep bid-rent function Land use in CBD (Office vs. Industry)  All firms are attracted to center  only some will be willing to bid enough  Office firms have steepest bid rent  will occupy the most central land  Market allocation is efficient

 

The office industry has the most to gain from being in the center manufacturing could gain, but not as much

Multiple land use rent gradient

Housing (abstracting from non-residential uses)



Housing price function with substitution (variable lot sizes)  With consumer substitution, residents consume less land as price of land goes up  Hence, more central lots are smaller  Housing producers substitute capital for land as move closer to center ◦ Higher Density (i.e. high rises) near CBD Changes to Commuting Model  All the following changes in assumptions make cost of commuting greater and therefore the bid rent function is steeper: ◦ Increased commuting costs ◦ Shopping and Recreational activities become more focused at the City Center ◦ Households move from one worker to two workers Income segregation  Households find location providing best tradeoff between land and commuting costs  Household move outwards as away from CBD, you save money on housing, but you spend more on commuting  MB from moving out (Land Consumption):  Because the rich person consumes much more housing, they save much more for each move out  MC from moving out (commuting costs):  Typically assume rich have higher marginal commuting costs (higher opportunity cost for time)

Key Elasticity's Determine Segregation Patterns  Income elasticity of demand for housing (IEHD): ◦ How quickly does housing consumption increase with income?  Income elasticity of commuting costs (IECC): ◦ How quickly do commuting costs increase with income? Income segregation (IEDH>IECC)

Income segregation (IEDH = IECC)

Empirical Evidence  One study (Wheaton 1977) has found that IEDH is roughly equal to IECC  If this is the case, then different income groups should be living in the same places Other Explanations for Income Segregation  Newer housing in suburbs: quality is higher, more modern, lower maintenance; poor get stuck with older central city housing  ―Urban flight:‖ crime, low school achievement, fiscal problems all more common in city centers Rich can afford to leave  Large-lot suburban zoning: very common, keeps price of housing high and poor are out Exceptions  In some cities, especially in Europe, the opposite is true: rich live in center, which is prohibitively expensive for poor, who live out in suburbs  Has to do with level of amenities in the city center (e.g. Paris vs. Detroit) Policy Ramifications  Policies that help rebuild the inner cities, bring amenities, decrease crime and pollution, improve schools, will bring some wealthy back from suburbs  Policies that limit exclusionary (large-lot) zoning will help bring poor out to suburbs and allow for higher suburban densities

The complete model (with ag)

Spatial distribution in modern, multi-centric cities  Jobs are generally far from city centers now  40% commute from suburban home to suburban job  Cities are increasingly decentralizing with smaller portion of population in center  As population shifts outward, density gradients have decreased significantly Why are we decentralizing?  Rising income? This will cause decentralization  If IED for housing> IE of commuting  Lower commuting costs due to better roads, better cars, transit systems  Urban problems: old housing, income/racial mix, fiscal problems, crime, education ◦ There is considerable empirical support for this

Manufacturing bid rent and beltways

Offices drawn to suburbs by  Decoupling of operations: increase in splitting offices into front and back offices  Better communication and connectivity: email, phones, Internet, teleconferences  Many businesses now are less reliant on face to face meetings  However, there will always be advantage to downtown clustering for certain types of firms that require face to face contact

Demise of the Mono-centric City  100 years ago, the spatial distribution of employment and population started to change  Define ◦ A central city is the territory of the municipality at the center of the metropolitan area ◦ A Suburban area is the rest of the metropolitan area

The Spatial Distribution of Jobs and People  Distribution of Employment  Employment decentralization  In 1948 jobs in central city were twice those in suburban areas

\\ The Spatial Distribution of office space Three employment centers:  CBD  Sub centers: an area with a minimum 10,000 workers and 25 worker per hectare  Dispersed: everywhere else


The Spatial Distribution of Population  Central city share is 36%  Suburban share is 64%  The table below shows that urban population is more decentralized than urban employment 


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Urban Density Worldwide  Cities are defined as areas of high population density  Variation in density of world cities  US cities rank lowest

The demise of the Mono-centric City
Decentralization of Manufacturing: Trucks and Highways ◦ The intra city truck (1910). Twice as fast and half as costly as horse wagon 1910 1920: Number of trucks in Chicago increased 800 to 23,000 ◦ Tipping the balance away from central location, Truck decreased cost of moving output relative to the cost of moving workers, Firms moved closer to low-wage suburbs ◦ The intercity truck (1930s), Long-distance travel became feasible, Improvement of intercity highways facilitated truck transport, Truck freight grew at expense of shipping and rail freight, Most manufactures oriented to highways, not rail terminal or port

The demise of the Mono-centric City  Decentralization of Office Employment ◦ Before 1970s: paper-processing back-office operations in suburbs ◦ Electronic transmission of information allows decoupling of office activities, with information processors in suburb and decision-makers in CBD  Decentralization of population: Reasons ◦ Increase in income: ambiguous effect because higher income  Increases the opportunity cost of commuting, but also  Increases demand for housing and land, pulling people to low-price suburbs ◦ Lower commuting cost decreases the relative cost of suburban living ◦ Old housing in center ◦ Central-city fiscal problems ◦ Crime ◦ Variation in education Urban Sprawl  Sprawl Facts  1950 - 1990: urban land increased 245%; urban population increased 92%

Urban Sprawl The role of public policy ◦ Under pricing of commuting encourages long commutes ◦ Mortgage subsidy increases housing consumption ◦ Under pricing of fringe infrastructure ◦ Zoning: Minimum lot sizes to exclude high-density housing Consequences of Sprawl  Environmental consequences  Increased consumption of fossil fuels  Increased demand for public goods, e.g., highways and schools  Inefficient to provide mass transit  Depletion of world reserves of fossil fuels results in a non sustainable life style  Suburban life: more land, same residential energy, 30% more travel  Environmental quality: cleaner cars offset increased mileage  Greenhouse gases increase with mileage  Loss of farmland hasn‘t increased agriculture prices  Low transit ridership

Financing Urban Infrastructure
 Institutional models and allocation of responsibilities  Alternative financing instruments  Effects of financing instruments on urban planning and control Institutional Models and Allocation of Responsibilitie\ What Is Urban Infrastructure ?  Infrastructure is essential to urban development  Water o Water treatment and distribution o Waste water disposal/treatment  Transport o Urban roads o Urban transport  Electricity  Waste disposal  Rapid urbanization has increased the demand for urban infrastructure in India  Since public funds for these services are inadequate  Urban organizations have to look for alternative sources for financing their infrastructure needs  Accessing capital markets and PPP have emerged as viable options to finance urban infrastructure  Urban population in India is 285 million (Census 2001) and is likely to be twice its present level by 2030  Rapid urbanization has increased the demand for urban services  The Steering Committee on Urban Development o for Eleventh Five Year Plan of India (2007-2012), has estimated that total fund requirement for implementation of the Plan target in respect to urban water supply, sewerage and sanitation, drainage and solid waste management is o Rs. 12,702 billion  The 74th Constitutional Amendment gave urban local bodies (ULBs) the responsibility to provide these services  The sources of revenue devolved to ULBs are, however, not sufficient and still depend on higher levels of government  Financial resources from all these sources, however, fall far short of the urban sector‘s estimated investment requirements  Since public funds for these services are inadequate, ULBs have to look for alternative sources for financing their infrastructure costs  Market-based financing and Public-Private Partnership (PPP) have emerged as a viable alternative to finance infrastructure investments


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Has to Address Infrastructure Financing • Urban infrastructure entails high initial investment and operating costs – Infrastructure assets and facilities – Equipment • Urban infrastructure services share a common feature: monopolistic situation Government Is Responsible for Infrastructure • Infrastructure services must satisfy users‘ needs – Capacity – Quality standards • Planning infrastructure development • Ensuring that investments are financed and implemented on time • Ensuring that operating services are provided Delivery Model: Government • Government can directly provide urban infrastructure services – Especially when service costs cannot be charged to users • Urban roads (non tolled) • Usual institutional organization: government department – Government Model Allocation of Responsibilities
Activities Financing responsibility Funding Sources Municipal Budget Municipal Budget or User


Financing Instrument

Investment Operations

Government Government

Taxes, Debt Taxes,Tariff

– Government Can Also Transfer Responsibilities • Especially when service costs can be charged to users – Water and waste water, urban transport services, electricity, waste disposal • Two main models – Public utility owned by government – Private company through a PPP contract (public private partnership) • Public Utility Model: Allocation of Responsibilities
• • Activities Investment • • • • • Financing responsibility Government or Utility Utility • • • Funding Municipal Budget Utility Budget • • • Financing Instrument Taxes, debt Debt


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User and (possibly) Subsidy

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Tariff Taxes


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Market-Based Financing System Credit Rating  Rating agencies provide investors with an 

 

independent third-party evaluation of the credit strength or weakness of a particular bond issue In the India context, rating agencies do not rate cities or countries, rather they rate the creditworthiness of a particular debt offering, essentially addressing the ability and willingness of a government issuer to pay its debts Ratings of local governments establish a transparent credit record, and a reference framework for current and future performance of local finances and debt management In addition to providing an initial rating of a bond offering, agencies continue to monitor the capacity of the issuer to make timely payments of principal and interest throughout the term of a bond This continued monitoring throughout the life of a bond issue is important to the effective operation of a secondary market in local bonds

Tax-Free Municipal Bonds
 Income Tax Act provides tax preferences for investments in infrastructure projects  These are not available for financing municipal infrastructure  To boost the municipal bond market, the Government of India decided to provide tax-free status to municipal bonds

Pooled Financing
 Only financially strong, large municipal corporations are in a position to directly access capital markets  Most small and medium ULBs are not able to directly access capital markets on the strength of their own balance sheets  Also, the cost of the transaction is another barrier  In 2003, the Tamil Nadu Urban Development Fund issued a bond by pooling 14 municipalities for commercially viable water and sewerage infrastructure projects

Public-Private Partnership Options
 Service contracts  Performance-based service contract  Joint sector company to implement and finance the project  A management contract for operations and maintenance (O&M)  Construction cum build-operate-transfer (BOT) contract

Matrix of Responsibilities\]’



Investment: Government Operations: Government Investment: Government Operations: users Investment: investors, lenders Operations: “client”, users Investment: investors, lenders Operations : users











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Alternative Financing Instruments Instrument: Taxes • Taxes finance the general budget • All taxpayers contribute, even those who do not use infrastructure services – But when proceeds of specific taxes are allocated by law to an infrastructure sector – Or when property or income taxes in developed areas are proxy charges for some infrastructure services Financing Instrument: Tariff Charged on users of services only Tariff income should finance all operating costs – But government may subsidize services • E.G. When tariff capped for social concerns Utility model: + tariff income should also finance debt service Financing Instrument: Tariff (2) Private company model: + tariff income or client fee (BOT) should ensure a satisfactory financial return to private investors – Tariff should be ruled by PPP contract provisions – Government may contribute to investment when a low financial rate of return impedes full market financing Financing Instrument: Debt Debt can be used under all delivery models, but – Government: local governments must be allowed to borrow funds (not in china) Debt should finance investments (not operations) Urban infrastructure requires long term debt – 10 years + with duration linked to assets amortization schedule Banks assess borrower risks before lending – Strength of financial accounts affects the cost of debt (municipal budget/utility/private Cny) Instrument: Debt (2) Government model: debt finally paid by taxpayers – Debt reimbursed by the municipal budget Utility model: a government guarantee may be required if utility financially weak or poorly managed Private BOT or concession: project finance debt – On the basis of the strength of operating income Instrument: Bond Bond: long term lending instrument provided by financial investors – Insurance company, pension funds – Domestic or international investors Bonds should finance investment only Instrument: Bond (2) Bond issues are constrained by the country legal and regulatory framework – Municipal bonds are not allowed in china Bond availability and pricing depend upon the credit rating of the issuer – Independent credit rating agencies Instrument: Equity Equity is essentially accessible to private companies – Possibly to utilities through securitization (investors, stock exchange) of assets generating income
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Investors provide equity if the expected financial return is consistent with market level and the project risk profile Financing Instrument: Equity (2) • Equity investors are prepared to take more risks than bond investors or lenders • But equity is the most expensive financing instrument for private companies – And utilities when they can attract investors – Effect of Financing Instruments on Urban Planning and Control • Planning Infrastructure Financing Means: – Assessing infrastructure needs – Preparing realistic financing plans – Planning the use of relevant financing instruments Assessing Infrastructure Needs Urban development is dependent upon infrastructure – Demand of services is driven by population growth and economic activities – Infrastructure should be laid down before land is developed Infrastructure costs should be estimated as from preliminary feasibility studies – Investment and operation costs Preparing a Realistic Financing Plan of Infrastructure Balancing financing needs / funding – Amounts and financing instruments – Time frame: each delivery model entails its own decision process Setting tariff is part of financing plans – Objectives: operating income should fully fund infrastructure services • But for social constraints Specificities: Government Model The city budget process is affected by the planning of infrastructure At first assess impact of infrastructure financing on budget during construction and operations Then size funding to balance financing plan – Impact on tax levels and indebtedness Specificities: Public Utility Model – Independent budget process – But the municipal budget is affected by government contributions to utility – Financial controls of and reporting by utility crucial to assess financial risks for government • Government can control as owner Specificities: Private Company Model Assess very early the possibility to mobilize private sector skills and funding – To estimate savings on public expenses – At the early stage of urban planning Set the services objectives, price mechanisms and standards in the tender documentation – Including draft PPP contract Specificities: Private Company Model (2) Sponsors should be responsible for their own demand assessment when possible – Otherwise government may have to provide unnecessary uptake guarantees Arm‘s length negotiations are required on grant/ subsidies/ guarantees by government – Amounts and payment schedule should be negotiated with the PPP contract
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Development Plan
• • Preparation and Implementation of development plans has been the backbone of the operation of physical planning since 1947 The plan is a drawing; a diagram made by projection on a flat surface especially one showing the relative position of parts of a buildings; a large scale detailed map of a town or district; a table indicating times, places, etc. of intended proceedings, etc.; a scheme of arrangements; a project; a design; a way of proceeding The development plan is a physical design of an area (district, town, city) with already existing land use or future land use, this sort of a plan is a representation, in a geographical or spatial sense, of actual physical structures or elements The development plan- define the sites of proposed roads, public and other buildings and works, airfields, parks, pleasure grounds, nature reserves and other open spaces or allocate areas of land for use for agricultural, residential, industrial or other purposes The development plans are prepared on the basis of a comprehensive survey of wide range of factors which are related to the use, condition and quality of land and buildings which, together with analysis of trends and needs relating to population, employment, shopping etc., would influence the aims of the local planning authority in preparing their plan The development plan comprises of written statement and a series of maps A written statement usually contained a brief summary of the main proposals of the plan without any substantiation of the basis on which the proposals are made Construction of plans for regulation of growth and extension of town, so as to secure best conditions of housing and traffic, situation of public buildings and open spaces, etc.

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The traditional concerns or objectives of town andcountry planning as: 1. The use of land to the best advantage 2. The maximum improvement in physical conditions that can be obtained within the limits of available resources, in accordance with human needs and priorities 3. Surroundings of quality and beauty that will inspire and enrich human existence at home, at work and at leisure 4. The conservation of natural resources and beauty and the worthwhile historical and architectural endeavors of man

Stages in the development planning process
1. 2. 3. 4. 5. Definition and clarification of future problems and the inter-relationships between them Identification of future conditions which might arise from the problems identified Identification of constraints which determine the range of possible solutions to the problems Determination of goals and objectives which plans are meant to achieve Formulation of alternative ways of achieving the goals and objectives which plans are meant to achieve 6. Evaluation of the alternatives 7. Recommendation of preferred alternatives Development Control Regulations
• • The control over development is an integral part of the operation of physical planning Development is defined as the carrying out of buildings, engineering, mining or other operations in, or over, or under land or the making of any material change, in any building or land in the use of any building or land and includes demolition of any existing building, structure or erection or part of such building, structure or erection, reclamation, redevelopment and layout and sub-division of any land


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The key elements of this legal framework for controlling development are : 1. Governments sanction to the Regional Plan or Development Plan 2. Requirement of obtaining Development Permission 3. Enforcement and penal provisions against carrying out development in contravention of Draft or Sanctioned Plans • In order to ensure that the new development takes place in conformity with the Draft or Sanctioned Regional Plan, requires that every person who intends to carry out development in the Region obtains a permission of the Municipal Authority in whose jurisdiction such development is proposed • Where the land is situated outside the jurisdiction of any Municipal area, the permission of the Collector is required before carrying out the development The Regional Plan - 1973, defines land use zones very broadly and divides the region into 5 principal land use zones, namely: 1. Urbanisable Zone -U Zone 2. Industrial Zone -I Zone 3. Recreational Zone- R Zone 4. Forest Zone- F Zone 5. Green Zone -G Zone • The U Zone covers existing towns, and areas marked for their planned expansion, proposed new towns and other new township areas. In this zone, the development control is to be exercised in accordance with the development plans and detailed Development Control Regulations of the respective towns Large industrial areas outside the existing towns are designated as I Zone they are developed and controlled by the local Industrial Development Corporation Developments in F and G zone, which are essentially conservation areas, are controlled by the D.C.

• •

• • Zoning is the regulation and restriction of real property by a local government It is the most common form of land-use regulation, as municipalities rely on it to control and direct the development of property within their borders, according to present and potential uses of the property Zoning involves the division of territory based on the character of land and structures and their fitness for particular uses Consideration is given to conserving the value of property and encouraging the most appropriate use of land throughout a particular locality A municipality's power to enact zoning regulations is derived from the state in an exercise of its police power Police power is the inherent power of the government to act for the welfare of those within its jurisdiction The power to impose zoning restrictions is conferred on a municipality by a state enabling statute Zoning laws are intended to promote the health, safety, welfare, convenience, morals, and prosperity of the community at large, and are meant to further the general welfare rather than to improve the economic interests of any particular property owner They are designed to stabilize neighborhoods and preserve the character of the community by guiding its future growth

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The essential purpose of zoning is to segregate residential, commercial, and industrial districts from one another Within these three main types of districts there may be additional restrictions as to population density and building height The use of property within a particular district is for the most part uniform For example, if a district is zoned for industrial use, no residential buildings are normally permitted there Municipalities exercise wide discretion in fixing the boundaries of commercial and industrial districts A number of ordinances have been enacted to protect residential zones from encroachment by gasoline stations, public parking facilities, businesses selling intoxicating liquors, and factories that produce smoke or odors Zoning is a device of land use planning used by local governments in most developed countries The word is derived from the practice of designating permitted uses of land based on mapped zones which separate one set of land uses from another Zoning may be use-based (regulating the uses to which land may be put), or it may regulate building height, lot coverage, and similar characteristics, or some combination of these Similar urban planning methods have dictated the use of various areas for particular purposes in many cities from ancient times Zoning may include regulation of the kinds of activities which will be acceptable on particular lots such as open space, residential, agricultural, commercial or industrial The densities at which those activities can be performed (from low-density housing such as single family homes to high-density such as high-rise apartment buildings) The height of buildings The amount of space structures may occupy The location of a building on the lot (setbacks) The proportions of the types of space on a lot, such as how much landscaped space, impervious surface, traffic lanes, and parking must be provided In practice, zoning is used to prevent new development from interfering with existing residents or businesses and to preserve the "character" of a community Zoning is commonly controlled by local governments such as counties or municipalities, though the nature of the zoning regime may be determined or limited by state or national planning authorities or through enabling legislation factors into consideration the most

When enacting zoning ordinances, a municipality takes many significant are        

The density of the population The site and physical attributes of the land involved Traffic and transportation The fitness of the land for the permitted use The character of neighborhoods in the community The existing uses and zoning of neighboring property The effect of the permitted use on land in the surrounding area Any potential decrease in property values The gain to the public at large weighed against economic hardships imposed on individual property owners  The amount of time that the property has remained unimproved, reviewed in the context of land development in the area as a whole


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Environmental Controls • Environmental law and regulation have significantly affected land • Objectives are not only to conserve the environment but also protecting aesthetically pleasing surroundings, protecting health and safety, preserving historic and cultural heritage, and preserving natural resources • An EIA may be required for projects such as the rerouting of an interstate highway, construction of a new dam, or expansion of a ski resort on federally owned land • The EIA is a tool to assist in decision making, providing information on the positive and negative environmental effects of the proposed undertaking and alternatives • The EIA must also examine the effect of not implementing the proposed action • The effect of environmental policies on land use has been substantial Selection of site location, launching a new project-site preparation & government clearances • Site planning is a vital component of any type of building activity and is the first step • With growing urban development and environmental degradation it has become imperative to determine landscape design parameters, and also provide rules, regulations, controls and procedures for the protection, preservation and modification of surrounding environment • In most of the cases the site is selected by the developer before commencement of design phase • Ideally the design team should be involved in site selection and should assess the appropriateness of the site relative to the proposed development • Analysis and assessment of the site characteristics in terms of its capacity to provide natural resources inside the building such as light, air and water without damaging the natural environment should be carried out during site selection and analysis process The process has been divided into two parts: • Site selection and site analysis • The concerns related to all natural resources during site planning are covered in the site analysis section • The aim is to integrate an architecturally sustainable design with the natural environment with least damage to the nature and at best improving it by restoring its balance • Site selection process, which brings it upfront all elements that would affect future development of the project • Site analysis, which brings it upfront all those elements and natural resources that would get affected by the project The elements that get affected on site due to Project development are: • Soil conditions if not preserved • Hydrology of the site • Topography • Characteristics of land due to hard paving • Built up spaces on the site • Existing vegetation • Solar access • Wind patterns

The selection should be based upon severalfeasibility and impact studies related to sustainability such as existing wind pattern, solar access, soil, air, water conditions, noise pollution, and bio diversity


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Land use • The first feature, which should influence development of a new project, is the existing land use pattern of the neighbourhood of the project, whether the proposed development conforms to the development for that area • The first concern while selecting the site should be suitability of the site • This should be analyzed with respect to the surrounding existing development, natural environment and urban environment to define whether the site should be built or not and secondly to judge whether the proposed development is best suited on the considered site • Proposed land use must conform to the approved Master Plan/Development plan of the area • If there is no approved Plan, consent from appropriate authority should be taken and should be submitted for Environment clearance • If the area is outside municipal limits/outside planning area, full justification for the proposed development should be provided Location of site with respect to existing eco-system on site • Development of new construction projects should not have a negative impact on the existing biodiversity and ecosystem of the site • It should not disturb sites with heritage and cultural values such as protected monuments • Constructed projects on selected sites should not disturb aesthetics and scenic beauty of a location • Sites for new developments should be carefully assessed in context of the wider environment particularly in relation to the habitats dwelling on site or on adjacent sites • There may exist on the site some rare or endangered species of plants and animals, such sites are considered unsuitable for development • The site(s) selection can be an effective approach in minimizing the requirement of mitigation measures • Project siting restrictions depend on the sensitivity of the site and its surrounding environment and the following considerations should be made while selecting a site Analysis of cultural/historical considerations • Review the traditional or vernacular architecture of the region • The regional architectural style may be revealed through the use of vernacular architecture to form a design that is responsive to the local cultural characteristics, thus enhancing community values Restore historical or cultural resources on-site: • Historical features on-site can be integrated by either modifying or incorporating parts of the existing structure into the proposed design, thus adding to the cultural fabric of the area provided that these structures are not legally protected • Use of historical, energy efficient building techniques Historical, energy efficient building techniques that have been involved and sustained in response to local climatic or cultural characteristics can be used or modified to suite the proposed suitable design Analysis of urban context considerations • Analyze the city form: The delineation of the city form due to layout of roads, open spaces, or architectural forms should be analyzed • For example, a building may be visually unifying element, providing connections and continuity with adjacent buildings • Sites at the end of important vistas or adjacent to major city squares should be reserved for important public buildings


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Review the potential of views: Important city views of plazas, squares, monuments, and natural features (such as parks and water fronts) should be considered It is important to design the proposed building in a manner that will enhance and preserve such views for the public

Environmental consideration The proposed project location should meet the standards prescribed by the Central Pollution Control Board (CPCB) and IS standards for the following environment parameters: • Ambient air, water and noise quality standards • Natural disaster prone areas • Ecologically sensitive areas Ambient environment quality in the region • Levels of air, noise and water pollution should be surveyed and considered carefully before implementing the building design • For example: High level of air, noise and water pollution and location near pollution sources such as heavy traffic roadways should be considered carefully to implement residential building • Ambient air: Assess the existing air quality of the site to determine if it falls under the permissible average levels as prescribed by Central Pollution Control Board (CPCB) • It should also be ensured that the development would not further deteriorate the air quality • Air quality monitoring involves estimation of concentration levels of suspended particulate matter (SPM), Respirable suspended particulate matter (RSPM), Sulphur dioxide (SO2), oxides of Nitrogen (NOx) and Carbon monoxide (CO) in the study area Mitigation measures to control air pollution • Air pollution may be caused by areas or point sources such as cities, industrial areas factories or by linear sources such as highways • Vegetation buffers can minimize the build-up of pollution levels in urban areas by acting as pollution sinks Natural disaster prone areas • Examine historical data for past trends of natural hazards, such as earthquakes, floods, or landslides, so that proposed development can be designed with the ability to withstand such eventualities • Other investigations may be carried out on relative mappings of natural winds, floods, or climatic data to ascertain the possibility of any other risks involved • If possible, new choices or other complementary structural techniques should be developed for the site Urban availability of water and other critical infrastructures like electricity, roads with adequate width and capacity • The infrastructure and utilities available, expected water and power requirement by the proposed new buildings and feasibility study of how much is available and what is the source of supply for power and water • The design team should gauge whether the site takes maximum advantage of natural resources, such as solar energy, natural vegetation, and geographical features, and should also analyze the proximity or remoteness of the site from existing transportation corridors, and its ability to match the needs of the building owner, users, and their occupancy patterns

Resource and needs‘ assessment of the project should be done at this pre-design stage. Issues which need to be identified at pre design and site selection stage are: • Connectivity to infrastructure and public transport networks • Power requirement and power source • Water requirement and water source • Waste management on the site • Urban infrastructure and facilities, public transport, infrastructure for power, water supply to meet the estimated requirement, sewage system network should be available nearby or should be made available with minimum environment impact • For example the residential areas should be well connected to the utilities like school, market place, sports and recreational facilities to meet the basic needs of a residential society • Take into consideration the impact of proposed future development on the infrastructure • Sharing of existing transportation or parking facilities may minimize the budget for infrastructure Onsite management of waste • Land acquired should be minimum but sufficient to provide for a green belt wherein the treated wastewater, if possible/ suitable, could be utilized from wastewater treatment systems • Space onsite for solid waste: Enough space may be provided for storing solid wastes. The space and the waste can be made available for possible reuse in future • Reuse negative urban spaces or industrial site: This should be done when existing urban amenities and infrastructure can be utilized, thus reducing the pressure on undeveloped land • Conformance to existing landscape: Layout and form of the project must conform to the landscape of the area without unduly affecting the scenic features of that place Guidelines/Recommendations for Site Selection • Site selection process includes analysis of several site factors • These are land-use, eco-system and diversity history and heritage, urban context and the environmental considerations Site analysis • After the first analysis of the site evaluation and site selection, the site should be analyzed with respect to all the issues involved in its sustainable development • The natural functions of a plot of land (hydrology, geology and microclimate) could be seriously disrupted by the placement of buildings on it if site analysis for optimum placement and design of buildings is not carried out • Layout the site activities and building requirements after carrying out detailed site analysis so as to ensure sustainable site development is in tune with its topography, climate, ecological character and functional requirements of the building • The main objective is to allocate and define the use of various parts of the site in a manner that is most appropriate to specific building activities to be carried on the proposed site • The purpose of site analysis is to determine the site characteristics so that proper drainage pattern and system, circulation pattern, landscape design and other site development features can be considered in relation to the existing site features and proposed building design parameters such as building form, solar orientation, shape, skin to volume ratio, materials etc. • The site analysis evaluates all the environmental determinants, which include (soil, air, water, solar access, noise), that could get affected due to development on the proposed site

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All the concerns and mitigation options for the concerns at site level are covered in this section Impact of development of the project on ecology and available resources on site, example impact of building shade on open spaces, existing wind patterns on the site, impact on soil erosion, existing vegetation, habitat protection, water and air pollution and waste handling should be assessed and mitigation options to reduce the negative impact on the resources should be carried out

Building siting • Building siting Geographical latitude and microclimatic factors such as wind loads and solar access: Improper planning and layout of buildings can affect the availability of natural resources to the occupants • For example, Large built volumes perpendicular to the wind divert the latter and tend to create a wind shadow of a length equal to 15 times the building‘s height (with wind velocity halved down) • Design of buildings could result in overshadowing existing buildings and sometimes also result in cutting down the availability of natural light in adjacent buildings • The way in which a building or group of buildings are sited in relation to other buildings, natural topography and landscape could have detrimental effects on its potentialities Impact on soil due to land disturbance • Top soil conservation: Topsoil is rich in organic content and is essential to establish new vegetation • Development projects involve disturbance to the existing soil conditions, removal of existing trees, which result into soil erosion, instability and overall change in the microclimate and drainage pattern of the site • Erosion, by the action of water, wind and ice, is a natural process in which soil and rock material get loose and removed • There are two major classifications of erosion - (1) geological erosion, and (2) man-made erosion Preservation of vegetation and landscape Development projects involve disturbance to the existing soil conditions, removal of existing trees and overall change in the microclimate and drainage pattern Measures to minimize hazardous effects should be put into effect Preservation of Air environment Air environment of the proposed site gets affected due to wind erosion, construction on site, transportation on site and heat island effect Dense urban areas tend to have higher air temperatures as compared to the surrounding lowrise rural areas because of the absorption and storage of a high percentage of radiation received by the built mass and minimized radiative heat losses from it

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Hydrology on site This coves two aspects, i.e. natural hydrology and quality of water 1. Natural hydrology: Undeveloped land has a certain capacity to absorb rainfall in the soils, vegetation and trees, also has a natural drainage pattern, clearing of vegetation and or construction of impervious surfaces (like roads, parking lots and buildings) reduce the capacity of land to absorb rainfall and increase the amount of storm water runoff and change the natural pattern of drainage 2. Quality of water: Storm water run off volumes generated from imperviousness of the developed site is transported into the receiving waters via urban infrastructure like gutters, pipes and sewers

The storm water volumes contain sediment and other contaminants that have a negative impact on water quality, navigation and recreation • Health and well being of construction workers • Construction activities pollutes environment • Large volumes of suspended particulate matters are released during construction work leading to air pollution • Unhygienic site sanitation facilities cause damage to environment and to health of the construction workers Recommendations and guidelines Design layout should ensure adequate solar access and ventilation Depending upon the geographical latitude and sky conditions a precise analysis of the local climate; surroundings, urban development and surrounding terrain in relation to solar access, daylight availability and predominant air movement should be carried out This would control minimum distances to be kept between the built up volume and open spaces The design of the layout should allow for wind protection and solar access in winter, and at the same time provide adequate sun protection and ventilation in summer months The size and density of the layout should provide desired comfort levels maximum from natural resources Solar path analysis and wind pattern assessment should be carried out in the design stage that would help developers decide upon the alternatives for the type of layout and the proportion of the built volume and open space in the layout For this section the submittals should be provided only to indicate the optimized layout of buildings on the site with respect to sun path and optimized solar access and availability of wind for natural ventilation Factors which shall affect the layout of a sustainable design Solar access Solar access in the morphology of clusters can be understood in terms of utilization of direct (and not reflected or diffused) solar radiation mainly for day lighting and heat gain Solar path analysis would help define the minimal distances between the buildings and the relations between built-up volume and open space

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Building types • Choice of building types depends mainly on the cost of the land, infrastructure, land availability and suitability as per the requirements • Each building type and combination of different type forms a matrix of environmental conditions, which affect the macro as well as the microclimate around and inside the building • Building types may be detached/semi-detached, with courtyard /patio, high-rise, row house Open spaces • The proportion of open space and its built-up edges should be designed such that it ensures winter solar access and summer ventilation • Vegetation may provide as shading and promote evaporative cooling • In hot dry climates, evaporative cooling through appropriately sized wet surfaces or fountains have a desirable effect


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Soil Conservation Topsoil removal and preservation is mandatory for development projects larger than 1, 00 hectare (Source: National Building Code 2005) Topsoil shall be stripped to a depth of 200 mm from areas proposed to be occupied by buildings, roads, paved areas and external services Top soil shall be stockpiled to a height of 400 mm in pre – designated areas for preservation and shall be reapplied to site during plantation of the proposed vegetation Measures to control erosion of preserved top soil Top soil shall be separated from sub-soil debris and stones larger than 50 mm diameter Sites that have area less than 1,000 hectare, soil should be preserved if soil test reports predict that its nutrient rich and landscape consultant finds it usable for re application in post construction landscape design Measures on site should be adopted both during construction stage and post construction to minimize soil erosion through wind and storm water run off Soil preservation It is important to consider and understand factors such as soil characteristics, climate, rainfall intensity and duration, vegetation and topography to predict the extent and consequences of soil erosion Human activities during construction can accelerate erosion by removing vegetation, compacting or disturbing the soil, changing natural drainage patterns, and by covering the ground with impermeable surfaces (pavement, concrete, buildings)

Guidelines A. Revised requirement of environmental clearance for construction projects B. Impacts and mitigation Measures for Site, Planning & Development C. Impacts and mitigation for Water Management D. Impacts and Mitigation Measures for transport Management and Air Pollution Control E. Impacts from Building materials and Constructions, including Solid Waste Management F. Energy conservation Measures including Bio-climatic Design G. Set of mandatory and expected criteria to be followed by the developer H. Submittals required to address questions in Form1 and 1A of the notification Broad framework of notification • The Government of India enacted Environment Protection Act, in 1986 • The process of Environmental Impact Assessment was made mandatory in 1994 under the provisions of the Act • From time to time amendments have been made to the EIA Notifications • Extending the provisions of the Act to cover additional activities, the notification was amended on 7.7.04 to include large construction projects including new townships and industrial estates  The notification was further amended on 14.09.06 and the environmental clearance for large construction projects was redefined and modified  The environmental clearance for large construction projects can be summarized as follows: • All Building /Construction projects/Area Development projects and Townships with threshold limits as given in table below shall need environmental clearanceThe environmental clearance procedure for project can be summarized as below: • Application for Prior Environmental Clearance (EC) • An application seeking prior environmental clearance in all cases shall be made in the prescribed Form 1 annexed herewith and Supplementary Form 1A as given in Appendix II, after the

identification of prospective site(s) for the project and/or activities to which the application relates, before commencing any construction activity, or preparation of land, at the site by the applicant The applicant shall furnish, along with the application, in addition to Form 1 and the Supplementary Form 1A, a copy of the conceptual plan

Stages in the Prior Environmental Clearance (EC) Process for New Projects: The environmental clearance process for new projects will comprise of a maximum of 2 stages These stages in sequential order are • Screening • Appraisal Screening • Scrutiny of an application by the concerned State level Expert Appraisal Committee (SEAC) for determining whether or not the project or activity requires further environmental studies for preparation of an Environmental Impact Assessment (EIA) for its appraisal prior to the grant of environmental clearance depending up on the nature and location specificity of the project • Applications for prior environmental clearance may be rejected by the regulatory authority concerned on the recommendation of the EAC or SEAC concerned at this stage itself • In case of such rejection, the decision together with reasons for the same shall be communicated to the applicant in writing within sixty days of the receipt of the application Appraisal: 1. Appraisal means the detailed scrutiny by the Expert Appraisal Committee or State Level Expert Appraisal Committee of the application and other documents like the Final EIA report, submitted by the applicant to the regulatory authority concerned for grant of environmental clearance • Transparent manner in a proceeding to which the applicant shall be invited for furnishing necessary clarifications in person or through an authorized representative 2. The appraisal of all projects or activities which are not required to undergo public consultation, or submit an Environment Impact Assessment report, shall be carried out on the basis of the prescribed application Form 1 and Form 1A as applicable, any other relevant validated information available and the site visit wherever the same is considered as necessary by the Expert Appraisal Committee or State Level Expert Appraisal Committee concerned 3. The appraisal of an application be shall be completed by the Expert Appraisal Committee or State Level Expert Appraisal Committee concerned within sixty days of the receipt of the final Environment Impact Assessment report and other documents or the receipt of Form 1 and Form 1 A, where public consultation is not necessary and the recommendations of the Expert Appraisal Committee or State Level Expert Appraisal Committee shall be placed before the competent authority for a final decision within the next fifteen days Grant or Rejection of Prior Environmental Clearance (EC): The regulatory authority shall consider the recommendations of the EAC or SEAC concerned and convey its decision to the applicant within forty five days of the receipt of the recommendations of the Expert Appraisal Committee or State Level Expert Appraisal Committee concerned within one hundred and five days of the receipt of the complete application with requisite documents, except as provided below 90 days? 1. The regulatory authority shall normally accept the recommendations of the Expert Appraisal Committee or State Level Expert Appraisal Committee concerned 2. In cases it disagrees with the recommendations of the Expert Appraisal Committee or State Level Expert Appraisal Committee concerned, the regulatory authority shall request reconsideration by the Expert Appraisal Committee or State Level Expert Appraisal Committee

concerned within forty five days of the receipt of the recommendations of the Expert Appraisal Committee or State Level Expert Appraisal Committee concerned while stating the reasons for the disagreement 3. An intimation conveyed to the applicant 4. The Expert Appraisal Committee or State Level Expert Appraisal Committee concerned, in turn, shall consider the observations of the regulatory authority and furnish its views on the same within a further period of sixty days 5. The decision of the regulatory authority after considering the views of the Expert Appraisal Committee or State Level Expert Appraisal Committee concerned shall be final and conveyed to the applicant by the regulatory authority concerned within the next thirty days a. In the event that the decision of the regulatory authority is not communicated to the applicant within the period specified in sub-paragraphs (1) or (2) above, as applicable, the applicant may proceed as if the environment clearance sought for has been granted or denied by the regulatory authority in terms of the final recommendations of the Expert Appraisal Committee or State Level Expert Appraisal Committee concerned b. On expiry of the period specified for decision by the regulatory authority under paragraph (1) and (2) above, as applicable, the decision of the regulatory authority, and the final recommendations of the Expert Appraisal Committee or State Level Expert Appraisal Committee concerned shall be public documents c. Clearances from other regulatory bodies or authorities shall not be required prior to receipt of applications for prior environmental clearance of projects or activities, or screening, or scoping, or appraisal, or decision by the regulatory authority concerned, unless any of these is sequentially dependent on such clearance either due to a requirement of law, or for necessary technical reasons d. Deliberate concealment and/or submission of false or misleading information or data which is material to screening or scoping or appraisal or decision on the application shall make the application liable for rejection, and cancellation of prior environmental clearance granted on that basis e. Rejection of an application or cancellation of a prior environmental clearance already granted, on such ground, shall be decided by the regulatory authority, after giving a personal hearing to the applicant, and following the principles of natural justice


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Design of Townships
• • The words “Integrated” , “Townships” are very loosely used and they don‘t mean to the fullest extent of living in the ―Township‖ where all the basic facilities are ―Fully Integrated‖ a facilities township: – School Hospital needs style roads Community

Essential Elements of a. Residences b. Basic i. ii. iii.Departmental Stores for iv. Entertainment and Health related amenities c. Infrastructure to i. Clean, Green ii. Safe and iii. Clean Water, etc • •



day life Wide

enhance and Secure

―Indian Culture‖ and evolution of ―Indian societies‖ is missing in most of our townships These townships seem to be just replicas of western culture where the independent families are widely accepted while Indian culture and societies are ―Patriarchal and Joint Families‖ in nature

The essential elements of Indian Societies are: a. Head of the House Hold – 1st Generation b. Young and Middle Age children – 2nd Generation c. Grand Children – 3rd Generation and the future of the country d. Guests • To create all these kinds of facilities in a township requires large land parcels • Due to high cost of land inside the city, the suburbs of the city is the only option • Even after going to suburbs, due to the current models of making plots and selling them as investment vehicles in India, the land parcels on the roads where there is good connectivity is hard to get • Thus most of the townships are developed far from the city • When away from the city it is even more important to create the ―Integration‖ of all basic facilities Methodology and Approach 1. Define the ―Need Hierarchy‖ 2. Product Mix Definition 3. Financial Viability of the project 4. Final Product Mix Design • In an effort to define the above steps, the first important thing is to understand the customer needs, which is step #1 The following is the approach: 1. Primary Research: Primary research is to directly speak to the customer and get the inputs 2. Secondary Research: Secondary research is done by talking to various types of users such as local developers, suppliers, some sample customers, working class people such as masons, carpenters, plumbers, etc


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Concept and Master Plan • The center of the concept is ―Connecting all ages of people‖ in one township to ensure ―A complete life cycle‖ • Thus population dynamics is essential while planning for a township • In the master plan, the residences can be divided in four major individual communities for social and physical separation while keeping all of them in one township Product Mix

After blending the research data and the underlying concept along with the social and physical separation to ensure privacy for each segment, the product mix is finalized: 1. Elite Residences , 1. Facilities 2. Apartments, 3. Villas,4. Guest houses and

Amenities Space School lots Hospital

1. Commercial 2. 3. Tot 4. Multi Specialty 5. Infrastructure-Physical & Social a. Recreational facilities- club house, swimming pool, gym b. Open Spaces- parks Social infrastructure: An integrated township always has the basic social infrastructure essentials.

School: A quality school with education up to at least 10th standard is set up within the township, reducing the travelling time between home and school and in turn providing the children with more time for play and studies Medicare: A good healthcare facility with at least 50-plus beds and an emergency care is set up within the township, thereby facilitating residents Recreation: Adequate space for basic sports such as football, cricket, tennis and badminton, fitness facilities including a gymnasium and swimming pools are set up within the township to enhance social lifestyle Community centre: A spacious, well-decorated community centre with a club house and a function hall is set up within the township Infrastructure and services: An integrated township needs to be self-contained in most aspects, essentially on basic infrastructure Road network: A well-planned road network both within the township and connecting to the nearest highway or main road is built, thereby easing communication

Water supply and management: A well-planned and sustainable water management system is built within the township, providing round the clock water supply to residents as well as treating the waste water generated within the township Electricity supply and management: Although an integrated township depends on a public or private utility supplier for basic power supply, it should have adequate, if not abundant, back-up power for both homes and common areas during temporary or scheduled power cuts or disruptions by the utility supplier Communication infrastructure: Good quality telecom services should be made available within the township Estate management: An integrated township should incorporate a well-equipped estate management Garbage and waste management: Good garbage collection, aggregation, treatment and disposal system is a must for a healthier and eco-friendly township Infrastructure maintenance: Proper and regular maintenance of roads, pathways, parks, electrical and plumbing infrastructure, children play areas and common areas including community centre is essential for a welldeveloped integrated township Security: Security and safety for all residents is a critical element of a township Shopping and entertainment: An integrated township is incomplete without shopping centers and entertainment areas Entertainment: Quality cinema or multiplex, popular games and kid entertainment facilities should be established within the township Shopping: Well-stocked grocery stores as well as shopping centers including garment stores, electronic goods should be established within the township Food courts: Good quality and hygienic food courts should be established within the townships to cater the residents Proximity to workplace: • While the intent of an integrated township is always to have the workplace and the residential dwelling in close proximity • It should establish adequate, well-equipped office space infrastructure and offer lower rentals to attract companies, banks and corporate houses and create ample opportunities for residents


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To smoothen communication between the township and the workplace for rest of the residents, the location of the township should be such that it is easily accessible from various parts of the city Government (2001 series) permitted FDI up to 100% for development of integrated townships, including housing, commercial premises, hotels, resorts, city and regional level urban infrastructure facilities such as roads and bridges, mass rapid transit systems and manufacture of building materials

Development of land and providing allied infrastructure will form an integrated part of township‘s development FDI in the development of integrated townships will be subject to the following guidelines: i) The foreign company intending to invest, shall be registered as an Indian Company under Companies Act 1956 and will henceforth be allowed to take up land assembly and its development as a part of Integrated Township Development All such cases would be processed by FIPB (Foreign Investment Promotion Board )on the recommendation of Ministry of Urban Development & Poverty Alleviation and other concerned Ministries / Departments Ministry of Urban Development & Poverty Alleviation will develop an exclusive cell to deal with such cases ii) The core business of the company seeking to make investment, should be integrated township development with a record of successful execution of such projects elsewhere iii)The minimum area to be developed by such a company should be 100 acres for which norms and standards are to be followed as per local bylaws / rules, In the absence of such bylaws / rules, a minimum of two thousand dwelling units for about ten thousand population will need to be developed by the investor iv) The investing Foreign company should achieve clear milestones once their proposal has been approveda. The minimum capitalisation norm shall be US$ 10 million for a wholly owned subsidiary and b) US$ 5 million for joint ventures with Indian partner/s the funds would have to be brought in upfront c) A minimum lock-in period of three years from completion of minimum capitalisation shall apply before repatriation of original investment is permitted d) A minimum of 50% of the integrated project development must be completed within a period of five years from the date of possession of the first piece of land. However, if the investor intends to exit earlier due to reasons beyond his control, it shall be decided by FIPB on a case-to-case basis v) Conditions regarding the use of land for commercial purposes, development charges, external development charges and other charges as laid down in Master Plan / Bylaws, preparation of layout and building plan, development of internal and peripheral development, development of other infrastructure facilities including the trunk services etc., will be the responsibility of the investor as per planning norms and standards on similar lines as those applicable to local investors In the absence of such standards and norms, every State Government may decide their own conditions for which the Urban Development Plan Formulation and Implementation guidelines circulated by the Ministry of Urban Development & Poverty Alleviation may serve as a guiding principle vi) Land with assembled area for peripheral services such as police stations, milk booths will be handed over free of cost to the Government / local authority / agency as the case may be \]] •


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vii) The Developer will retain the lands for community services such as (i) Schools (ii) Shopping complex (iii) Community centres (iv) Ration shop (v) Hospital / dispensary These services will be developed by developer himself and shall be made operational before the houses are occupied viii) The developer, after properly developing playgrounds, park, will make it available to the local authorities free of cost ix) The developer will ensure the norms and standards as applicable under local laws / rules x) For companies investing in Special Economic Zones,Foreign Investment Promotion Board may accord exemption to any of the above mentioned conditions on a case-to-case basis, this will, however, be an interim measure till guidelines are evolved in due course in a need based manner

xi) • • • • • High Rise Buildings Generally considered as one that is taller than the maximum height which people are willing to walk up; it thus requires mechanical vertical transportation This includes a rather limited range of building uses, primarily residential apartments, hotels and office building, though occasionally including retail and educational facilities High rise building is defined as a building 35 mts or greater in height, which are divided into regular intervals into occupiable levels To be considered a high rise building the structure must be based on a solid ground, and fabricated along its full height through deliberate processes ( as opposed to naturally-occurring formations ) A high rise building is distinguished by other tall man-made structures by the following guidelines: It must be divided into multiple levels of at least 2 mts height If it has fewer than 12 such interval levels, than the highest undivided portion must not exceed 50% of the total height Distinct divisions of levels such as stairways shall not be considered floors for purposes of eligibility in this definition Any method of structural support, which is consistent with this definition, is allowable, whether masonry, concrete or metal frame In few cases where such a building is not structurally self-supporting (e.g. resting on a slope or braced against a cliff), it may still be considered a high rise building but is not eligible for any height records unless the record stipulates inclusions of this type

• • • • • •

Minimum height • The cutoff between high-rise and low-rise buildings is 35 mts • This height was chosen based on an original 12 floor cutoff, used for the following reasons: 1. Twelve floor is normally the minimum height needed to achieve the physical presence which earns the name high-rise 2. The twelve floor limit represents a compromise between ambition and manageability for a worldwide database • A building of fewer floors may only be included as a high-rise when its exact height is known, in most cases a city is considered to have a satisfactory listing of high-rise buildings when all 12 floor buildings are counted

Single vs. Multiple buildings • In most cases there is no trouble in deciding what constitutes a separate building, only when they are linked in unusual ways is their a logical difficulty • The following rules have been adopted to set a uniform standard: 1. Any two towers which are separated for at least 2/3 of each towers height, are considered separate buildings unless the connection(s) form an unmistakable architectural unity, such as an arch-shaped building, sky bridges are generally not sufficient to unify two separate towers 2. Any structures which adjoin each other for more than1/3 of any of their heights should be considered one building unless• They were built as separate structures and neither one can be considered an addition to the other, this means that the interiors are not integrated at any level, including the ground floor or the basement; or • The structures are separated at ground level and connected for most of their heights but are normally considered separate buildings; or • An addition to a buildings forms a significant architectural disjunction 3. An addition on top of an existing building is never counted as a separate building from the one underneath unless it overhangs the lower building from another base High-rise market • Undeniably the high-rise building is also seen as a wealth generating mechanism working in an urban economy • High-rise buildings are constructed largely because they can create a lot of real estate out of a fairly small piece of land • Because of the availability of the global technology and the growing demand for real estate, skyscrapers are seen as the most fitting solution to any city that is spatially challenged and can‘t comfortably house its inhabitants • There has always been a relentless quest for height in architecture through the ages • The pyramids and spiraling towers are instances of man striving to create something aweinspiring in the past • The two main reasons people go for skyscrapers are either sheer necessity or to depict power and glory and both are justifiable says architect Hafiz Contractor • Skyscrapers are always associated with power and grandeur and they may well become indispensable in future Indian cities • The word ―Skyscraper‖ was coined in the late 19th century, reflecting public amazement at the tall buildings being built in the New York City • The structural definition of the word ―skyscraper‖ was later created by architectural historians, based on engineering developments of the 1880s which had enabled the construction of tall multistory buildings • This definition was based on the steel skeleton, as opposed to constructions of load-bearing masonry, which passed their practical limit in 1891 Skyscrapers in Hyderabad • Treating open space as an urban amenity • Urban open space is a term used in land use planning to define open space areas for ―parks‖, ―green spaces‖, and other open areas • The landscape of urban open spaces can range from playing fields to highly maintained environments to relatively natural landscapes • They are commonly open to public access, however, urban open spaces may be privately owned

• • •

Streets, piazzas, plazas and urban squares are not always defined as urban open space in land use planning "As the counterpart of development, urban open space is a natural and cultural resource, synonymous with neither 'unused land' nor 'park and recreation areas‖ Open space is land and/or water area with its surface open to the sky, consciously acquired or publicly regulated to serve conservation and urban shaping function in addition to providing recreational opportunities‖

Ownership • Generally considered open to the public, urban open spaces are nevertheless sometimes privately owned • Some examples of such places include higher education campuses, neighborhood/community parks/gardens, and institutional or corporate grounds • These areas still function to provide ―aesthetic and psychological relief from urban development‖ • Nevertheless, most commonly the term is used to reference spaces that are public and ―green‖

Values The value that urban open space provides to citizens can be broken into three basic forms; recreation, ecology, and aesthetic Recreational: Urban open space is often appreciated for the recreational opportunities it provides. Recreation in urban open space may include active recreation (such as organized sports and individual exercise) or passive recreation, which may simply entail being in the open space. Time spent in an urban open space for recreation offers a reprieve from the urban environment is offered Ecological • The conservation of nature in an urban environment has direct impact on people for another reason as well • As human live more and more in man-made surroundings – i.e., cities – he risks harming himself by building and acting in ignorance of natural processes‖ • Beyond this man-nature benefit, urban open spaces also serve as islands of nature, promoting biodiversity and providing a home for natural species in environments that are otherwise uninhabitable due to city development Aesthetic • The aesthetic value of urban open spaces is self-evident • People enjoy viewing nature, especially when it is otherwise extensively deprived, as is the case in urban environments • Therefore, open space offers the value of ―substituting gray infrastructure‖ • Value of urban open space can also be considered with regards to the specific functions it provides; essentially this is just another way to organize the basic reasons urban open space is valued One study categorizes the measures of value into six groups: 1) Utility 2) Function 3) Contemplative 4) Aesthetic 5) recreational 6) Ecological


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• • • •

These categories account for the value an urban open space holds to the development of the city in addition to just those things citizens consciously appreciate For example, the ―function value‖ of an open space accounts for the advantages an urban open space may provide in controlling runoff The final three values listed, aesthetic, recreational, and ecological, are essentially the same as the values that make urban open spaces consciously valuable to citizens Of course, there are several different ways to organize and refer to the merit of open space in urban planning

Public health • Urban open spaces offer health benefits to city residents through exposure to a natural environment • They offer citizens relief from the strains of urban environments and everyday demands • That respite can come in the form of a walk or run, time spent sitting or reading, watching the birds, essentially any time spent in the natural environment the open space offers • Research shows that when open spaces are attractive and accessible, people are more likely to engage in physical activity, which has obvious inherent health benefits Landscaping  The enhancement of an area‘s aesthetic beauty is directly related to that area‘s landscaping  Each parcel of land should be landscaped thereby reinforcing the area‘s sense of place  It adds to the visual appeal and contiguity of a site, it also performs important and invaluable function relating to the reduction of pollutants and storm water treatment  Landscape improvements have been implemented as well as pedestrian amenities  Increased landscaping enhances the aesthetic appeal of the area  The landscape is the green part of the city that weaves throughout - in the form of urban parks, street trees, plants, flowers, and water in many forms  The landscape helps define the character and beauty of a city and creates soft, contrasting spaces and elements  Green spaces in cities range from grand parks such as Central Park in New York City and the Washington DC Mall, to small intimate pocket parks


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