Impact of globalization on cities and city-related policies in India

Abstract

This chapter explores the implications of India’s post-1991 liberalization and globalization on the national urban system. Globalization (and the macroeconomic policies associated with it) not only resulted in rapid economic growth but affected cities in different ways, primarily by the growth of foreign direct investment (FDI). The urban population distribution in India reflects the absence of primacy; in fact, the million-plus cities grew more slowly in the 1990s in an era of lower population growth. High-quality residential and office space has been developed on the urban outskirts, fostered by rapidly rising land prices. FDI has focused on a limited set of sectors (including knowledge-based industries), resulting in selective (not unskilled) migration and growth along urban corridors rather than within cities. The macroeconomic reforms and globalization have forced many policy changes at the city level: Private sector involvement in infrastructure development and management; allowing city access to capital markets; and setting up central government funding programs to promote urban structural change. The impacts of globalization on cities (as opposed to the macroeconomic reforms) can be exaggerated: The scale of FDI is low compared with other Asian countries, the direct impacts were geographically concentrated in six larger cities, globalization has not accelerated urban growth, only a few economic sectors have been impacted, and the most obvious changes have been in the built environment (e.g., new buildings) and spatial structure.