Connect with us


Moving Towards Better Definitions of ‘Urban’ in India



According to the 2011 Census, 31% of the country is ‘urban’. Using definitions of urbanisation that are different from those used by the government, this column demonstrates that this figure may be an underestimate. It is important to recognise and fix the flaws in the current method of defining urban areas as it forms the basis for important policies such as eligibility for government schemes.

According to the 2011 Census, India is 31% urban – a statistic that is much-relied on to shape development strategies and perceptions about the country. The percent of India governed as urban – that is, administered by urban local bodies such as municipal corporations – is even lower.

In recent research, we compare the urbanisation rate of India using the two government definitions – the administrative definition and Census definition – which can be discretionary in nature, with two alternative definitions that make use of objective population threshold criteria (Tandel, Hiranandani and Kapoor 2016).

We argue that alternative definitions are better suited than the administrative definition used by the government to determine policies like eligibility for Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA).

Administrative and Census Definitions:

State governments ultimately determine the administrative status of settlements. The default category of a settlement is rural and it becomes urban only after the state government converts it following a requisite legal process.

Although there are guidelines that propose population and other criteria in order for settlements to be governed as urban, these are not binding on state governments. As a result, the decisions to convert settlements from rural panchayats to urban local bodies can be arbitrary and may vary across states. There may even be pressures or incentives (such as being able to access rural schemes) to not convert settlements to the urban category, even when they are de facto urban in nature.

The Census of India acknowledges the existence of settlements that are de facto urban but are governed as rural by creating a category called “Census towns” to identify such settlements. The criteria for being a Census town are having a population of at least 5,000, density of at least 400 persons per square kilometre, and at least 75% of the male main1 working population engaged in non-agricultural activities.

However, contrary to common perception, even the Census uses discretion in actually identifying these towns (Pradhan 2013). The Census includes these Census towns together with settlements that are urban as per the administrative definition in its definition of urban.

Alternate Definitions Based on Population Criterion:

As a counterpoint to the administrative definition and the census definition of urban, we study how the scenario would change if India used a population criterion of 5,000 or a population criterion of 2,500 for defining urban. These definitions are used by countries such as Ghana, Qatar, Mexico and Venezuela2.

We find that while India is only 26% urban using the administrative definition, it is 31% urban by the census definition, 47% urban by the 5,000 population definition, and 65% urban by the 2,500 population definition. The differences in urbanisation rates using different definitions are even starker at the state level.

For instance, Kerala goes from being 15% urban by the administrative definition to 99% urban by the 5,000 and 2,500 population definitions.

Urbanisation Rates and Socioeconomic Indicators:

It is difficult to find a precise definition that could capture the true nature of all places. However, studies like Buckley et al. (2009) and Khan (2000) have established a link between urbanisation and socioeconomic indicators, and one way to assess the suitability of various urban definitions is to examine the relationship of urbanisation rates using different definitions with these socioeconomic indicators.

In a system that justifies special treatment to rural areas because they are thought to be more deprived or agrarian, an examination of the relationship between the chosen definition and development or agricultural indicators is warranted.

We conduct a state-level comparison of the relationship between urbanisation rates as measured by the administrative, Census, and alternative definitions, and poverty rates, per capita net state domestic product, and share of working population engaged in agriculture and cultivation.

We find that the census definition and 5,000 population definition have a stronger relationship with these characteristics as compared to the administrative definition.

Eligibility for Government Schemes:

Using inaccurate definitions of urban and rural can be costly since, among other reasons, these categories are used as the basis for determining eligibility for various state and central government schemes, and standards of public goods and services delivery. For instance, MNREGA – the world’s largest employment guarantee programme in terms of a number of beneficiaries (Honorati, Gentilini, and Yemtsov 2015) – makes use of the administrative definition to identify rural areas and allocate funds to them.

A faulty or arbitrary way of defining settlements as rural implies that there is arbitrariness in the way in which people across the country are eligible for an employment guarantee. There is also a possibility that MNREGA funds are being allocated to settlements that are actually urban but are classified as rural by the administrative definition.

We compare the use of MNREGA – which has in-built self-selection mechanisms of providing unskilled manual work at close-to-minimum wage so that only the most deprived people demand it – with the four urban definitions, and find a surprising trend.

According to the administrative definition, more urban states3make more use of the scheme, while according to the other three definitions more rural states make more use of the scheme.

Figure 1. The relationship between MNREGA expenditure and urbanisation in Indian states and Union Territories (UTs)

Note: Eligible population is urban population when using the administrative definition.

This observation prompted us to undertake a district-level study of the relationship between urbanisation rates and MNREGA use. We control for other factors that could affect MNREGA use such as state-level effects, district development indicators, and political characteristics. We find that when using the administrative definition, more urban districts make more use of MNREGA, whereas using the 5,000 and 2,500 population definitions, more rural districts make more use of MNREGA.

There may be several explanations for this. For instance, district administrative staff of more administratively urban districts may be more adept at using government resources, or information asymmetries may be less in more urban districts leading residents to demand more of government schemes.

However, we believe that it is more plausible that the relationship indicates that the administrative definition is a poor indicator of the urban character of the district. This is supported by the fact that alternative definitions relate better with development indicators, and that we do not find evidence that more rural districts by the administrative definition as compared to alternative definitions (in other words, districts in which the administrative definition overestimates rural rates to a greater extent) make more use of MNREGA. This suggests that the scheme’s self-selection mechanisms broadly work in this respect.

Recognise and Fix Flaws in Current Urban Definitions:

Taken together, the results present a strong case that alternative definitions of urban are better suited than the administrative definition to reflect the urban character of settlements in India.

A precise and perfect method for defining urban and rural areas may be difficult and costly. Therefore, it may be more prudent to reduce the stakes of such definitions, to make definitions more reflective of ground realities, and to reduce the scope for political exploitation of subjective categorisation.

One way to reduce the stakes of definitions is to use objective criteria such as poverty rates and proportion of agricultural workers to determine eligibility for government schemes and policies and access to social services, wherever possible. Where this is not possible, instead of a standard definition for all scenarios, it may be worthwhile to explore using different definitions to determine eligibility for particular programmes.

Such an approach is used in countries like the United States and the United Kingdom, where different concepts of rural are used for different government programmes, depending on their objectives.

However, there is still merit in moving towards a more accurate and general definition of urban since characteristics such as population and population density themselves alter the nature of places and prospects of their residents, justifying the need to treat places differently.

Hence, while we adapt and reduce reliance on urban-rural categorisation, it is also important to recognise and fix the flaws in India’s current method of defining urban areas.


  1. Main workers are defined by the Census as those who “worked for the major part of the reference period (six months or more)”, as opposed to marginal workers.
  2. More countries, like Argentina and Ethiopia, use a 2,000 cutoff rather than 2,500, but we use the more conservative number as the threshold.
  3. More urban states, by the administrative definition, are states with a higher proportion of their population living in settlements that are categorised as urban by the administrative definition.

Disclaimer: The facts and opinions expressed in this article are strictly the personal opinions of the authors. League of India does not assume any responsibility or liability for the accuracy, completeness, suitability, or validity of any information in this article.

Published with permission from Ideas For India (, an economics and policy portal.

Komal Hiranandani

Komal Hiranandani is Consulting Senior Associate at IDFC Institute and a graduate student at Cornell University's Applied Economics programme. She also holds a B.A. (Hons) in Government from Georgetown University and is awaiting her L.L.B. (General) degree from Mumbai University. Her previous positions include Programme Officer at Asia Society India Centre.

Mudit Kapoor

Mudit Kapoor is an Associate Professor of Economics at Indian Statistical Institute, Delhi Centre. Before this, he was Assistant Professor of Economics and a Research Fellow at the Indian School of Business (ISB), Hyderabad. Prof. Kapoor’s research interests are in Development Economics, Gender and Political Economy.

Vaidehi Tandel

Vaidehi Tandel is Senior Associate at IDFC Institute, Mumbai. She has a PhD in Economics from the University of Mumbai. She has published co-authored papers in peer-reviewed journals and has co-authored a chapter in an edited book on the Indian economy. Her research interests lie in the areas of new institutional economics, urban economics, urban and metropolitan governance, and political economy.

Continue Reading


Election by Community Consensus: Effects on Political Selection and Governance

Community consensus elections are prone to capture by the local elite, and can lead to worse governance overall.




Multiple states in India incentivise village communities to elect their political representatives by community consensus, doing away with the need for state governments to organise official secret ballot elections. This article analyses the effects of these incentives in Gujarat for the period 2011-2015. It finds that such elections, like other community-based processes, are prone to capture by the local elite, and can lead to worse governance overall.

Community-driven development and local electoral reforms have become central tenets of policy across the developing country landscape (Mansuri and Rao 2013). Many states in India including Andhra Pradesh, Gujarat, and Punjab have tried to meld these two approaches together by incentivising the election of local politicians via community consensus. However, increasing community participation does not always lead to improved outcomes (Khwaja 2004), and qualitative evidence suggests that these processes are prone to capture by the local elite (Breman 2011, Ganguly 2013). My research (Arora 2018) shows that incentivising consensus-based elections reduces political competition, crowds in younger, more educated politicians, and worsens overall governance.

Financial Incentives for Consensus-Based Elections in Gujarat:

Since 2001, Gujarat has incentivised the election of local politicians via public consensus under its Samras (consensus) Panchayat scheme. Village residents are encouraged to deliberate amongst themselves and reach a consensus on who their political representatives should be. This scheme is aimed at preventing multiple candidates from standing for election, so that the sole candidate to file nomination papers can be declared as the unopposed winner. This prevents the need to organise official elections, reducing the state government’s the expenditure on the set up of polling booths and the hiring of election officers.

The policy has been fairly successful. In the 2011 elections, one out of every seven Gram Panchayats (GP) (elected village councils) in Gujarat were elected by consensus. That is, each council seat in these councils was filled by a candidate that faced no formal opposition.

The state government encourages consensus-based elections by providing untied grants to councils elected without formal opposition, that is, it directly rewards politicians who ensure that no other candidates stand for election. This financial grant increases discontinuously as GP population exceeds 5,000, from Rs. 200,000 to Rs. 300,000 for first-time samras GPs. The grant amount is even higher for the second- and third-time samras GPs, as well as GPs that elect all-women councils.

The state government does not delineate formal procedures or place any restrictions on how village residents should reach a consensus about their political representatives. Naturally, instances of creative approaches to reach a consensus abound. In 2011, the village Kumkuva in south Gujarat organised a private election to choose amongst three competing candidates and ensure the receipt of the financial grant (DeshGujarat, 2011). The village Vadavali, home to a substantial number of Hindu and Muslim families, has decided to divide the President’s five-year term equally between a Hindu and Muslim President (NDTV, 2017). However, survey evidence suggests that it is usually local elites who nominate candidates and mobilise consensus-based support to ensure receipt of the monetary benefits (Breman 2011, Bandi 2013, Ganguly 2013, Guha 2014).

Impact of Financial Incentives:

To estimate the impact of consensus-based elections, I exploit the fact that the financial incentives increase discontinuously as village population exceeds 5,000. I compare villages just below the population threshold with those just above to isolate the impact of the financial grant.

Three outcomes are examined in detail – political competition, since one of the stated objectives of the scheme was to discourage multiple candidates from running for political office; politician characteristics, to understand whether the grants crowded in individuals with different observable characteristics; council expenditure and MNREGA (Mahatma Gandhi National Rural Employment Guarantee Act)1 beneficiary selection, to test for measurable differences in governance by the council so-elected.

Political Competition:

Did the samras grant actually incentivise village residents to choose their political representatives without official elections? The data suggest that it did. In response to a hike in the samras grant, the number of candidates per seat fell by approximately 0.7. This is a substantive decrease given that the average number of candidates per seat is around 2.5. The number of seats won without any formal opposition also increases by 2.3, which again is a large effect given that the average number of unopposed seats is just over 3.

Figure 1. A decrease in the number of candidates per seat in response to the grant increase

Political Selection:

The fact that official political competition decreased in a substantial way leads us to question who exactly was crowded into political office. It is entirely possible that those who would have been elected without the samras grant continue to be those who occupy political office. In this scenario, the eventual losers of the electoral race would be discouraged from standing for election in the first place.

However, the samras grant may affect who is elected to political office. If the grant facilitates public deliberation amongst village residents or the nomination and support of candidates by the local elite, we may very well see a difference in observable characteristics of elected politicians, such as age, education, gender, and occupation.

Figure 2. Changes in politician age and education in response to the grant increase

We can test for this change by looking at how the observable characteristics of elected politicians change when villages are faced with bigger samras grants. The grant increase crowds in politicians that are, on average, four years younger and have two more years of schooling. Despite additional incentives for female representatives, the grant increase does not usher more women into political office. I also test for effects on occupation, and find that the grant does not increase the proportion of candidates from agricultural labour, farming or business backgrounds. All of these effects are driven by seats that are not reserved for women.


Consensus-based elections could crowd in younger, more educated politicians for two reasons. First, the majority of rural residents may consider these characteristics to be desirable for an effective political leader, and public deliberation helps shift candidates with these characteristics into political office. Under this hypothesis, we would expect to see GPs that face higher samras grants enjoying better governance than GPs that face lower grants. Second, local elites may nominate younger, inexperienced candidates that serve as political figureheads. This explanation is consistent with survey evidence that indicates that the grant amount is only used to justify nominations by the local elite, who threaten detractors in the name of village development. Under this scenario, we would not expect to see governance improve. In order to separate between the two hypotheses and determine whether consensus-based elections have had a beneficial impact on governance, I turn to multiple measures of the performance of the elected council.

Government Performance:

To get a sense of the impact of the samras election grant on government performance, I test for changes in local expenditure and income generation close to the grant threshold. Total expenditure in the GP falls by Rs. 1,200,000, a decrease of over 50% of the average budget. This decrease is driven by a fall in expenditure categories that are directly controlled by the elected council, such as programme expenses of the agriculture, education, and health departments, as well as salaries and other administrative expenses. Expense categories that are chosen by and tied to grants received from the state and central government do not fall, which is consistent with the elected council having less control over these decisions.

Figure 3. A decrease in council expenditure in response to the grant increase

I also test for changes in the implementation of MNREGA. Existing work shows that while the Act is intended to guarantee one hundred days of employment to each rural household, in practice the amount and targeting of work provided is left up to local implementing authorities, and heavily influenced by the elected council (Gupta and Mukhopadhyay 2014).

The samras grant does not appear to affect how much employment is generated. This is consistent with most public works under MNREGA being approved at the block and district level. Targeting, however, is primarily the responsibility of the elected council. The number of Scheduled Caste and Scheduled Tribe (SC/ST) households employed under MNREGA decreases in response to the grant hike. This extensive margin response also translates into an intensive margin response – person-days of NREGA employment for SC/STs fall. This finding is indicative of more regressive targeting of MNREGA employment, and worse governance overall.


The results of this research inform policymakers about the impact of the samras consensus-election grants. The results indicate that financial incentives can induce village electorates to choose their political leaders without formal opposition. The grants also crowd in younger, more educated candidates and politicians. However, administrative and developmental expenditure in the village falls, and MNREGA employment is targeted more regressively. These findings are consistent with the fact that politicians that rely on the support of local elites, who have a greater say in elections based on community consensus, are not incentivised to appease village residents in order to get re-elected.

Note: MNREGA aims to enhance livelihood security of people in rural areas by guaranteeing hundred days of wage employment in a financial year to a rural household whose adult members volunteer to do unskilled manual work.

Disclaimer: The facts and opinions expressed in this article are strictly the personal opinions of the author. League of India does not assume any responsibility or liability for the accuracy, completeness, suitability, or validity of any information in this article.

Published with permission from Ideas For India (, an economics and policy portal.

Ashna Arora

Ashna Arora is a PhD candidate at the Department of Economics at Columbia University. Her research focusses on crime, labour markets, and political economy. Prior to her doctoral studies, she completed an M.Sc. in Quantitative Economics from the Indian Statistical Institute and a B.A. (Hons) in Economics from the University of Delhi.

Continue Reading


Delhi Alumni Association of Assam Prepares Research Report on Assam Floods

The Ministry of Development of Northeastern Region (DoNER) has helped in setting up Brahmaputra Study Centre at Gauhati University, Assam.



NEW DELHI: The Delhi Alumni Association of Assam (DAAA) presented here today a Research Report on Assam Floods to the Union Minister of State (Independent Charge) of the Ministry of Development of North Eastern Region (DoNER) Jitendra Singh.

While appreciating the initiative by the academicians of Assam region, Singh said that floods in Northeast, particularly in the States of Assam, Arunachal Pradesh and Manipur have virtually become a perpetual phenomenon, occurring year after year, and causing tremendous loss to lives and property.

A serious and comprehensive future strategy to avoid such occurrences, again and again, is urgently called for, he said.

Singh disclosed that the Ministry of Development of Northeastern Region (DoNER) has, on its own initiative, helped in setting up “Brahmaputra Study Centre” at Gauhati University, Assam.

The Centre has also started functioning, he said, and informed that the first major research study, already initiated for the last few months, deals with the ways and means to control and prevent the occurrence of floods. For this purpose, he said, experts of international repute are also being involved for their inputs.

The minister said that the present government has always been in the forefront in coming to the aid of flood-related hardships of the people of Northeast.

This, he said, is borne out by the fact that last year, in the month of July/August, when there was extraordinary damage caused as a result of unprecedented rainfall, Prime Minister undertook a visit to the Northeast, where he personally reviewed the flood situation, particularly pertaining to the States of Assam, Arunachal Pradesh and Manipur, and also announced on-the-spot financial assistance of Rs.2,000 crores.

Singh suggested to the members of Alumni Association to share their findings and inferences with NITI Aayog also, since now there is an exclusive NITI Aayog Forum for Northeast.

He said that he would arrange a meeting to discuss the findings of the research report by the senior officers of the Ministry of Northeast (DoNER), who can then, at their level, also discuss the same with the representatives of the NITI Aayog.

The minister also said that a number of options have been suggested in the past for prevention of flood-like situation. These include embankments along river Brahmaputra, dredging for de-siltation in large rivers, construction of a high gravity concrete Dam, etc.

However, he said, a final call can be taken only after studying the various aspects, including feasibility, cost-effectiveness and sustainable viability of any future arrangement.

Continue Reading


SILVER LINING: Naga Accord Final Draft Almost Ready

No change of state boundaries; autonomous Naga territorial councils for Arunachal and Manipur; a common cultural body for Nagas across States



NEW DELHI: The Central government and Naga armed groups are said to have finalised the substantive portions of the peace accord which is likely to be signed before the monsoon session of Parliament.

The accord, according to officials does not change the boundary of states; provides autonomous Naga territorial councils for Arunachal and Manipur; a common cultural body for Nagas across states; specific institutions for state’s development, integration and rehabilitation of non-state Naga militia and the removal of the Armed Forces Special Powers Act.

RN Ravi the Government Interlocutor informed the media that ‘Yes, we are pretty close to finalising the (Naga Peace) accord’.

Talks between Ravi and Naga bodies, the Naga National Political Groups (NNPGs) — comprising the representatives of six influential Naga rebel groups — and NSCN-IM are currently taking place in Delhi. One issue still being negotiated is a “symbolic one”, wherein Naga groups are demanding a separate flag for the state.

The Centre has, however, made it clear to the Naga groups that it will not be able to concede that demand in the peace accord.

Besides Manipur, there will be an autonomous Naga territorial council in Naga-majority areas of Arunachal Pradesh but not for Assam.

The accord also provides for a common cultural body for Nagas across states which will be statutory in nature. This body, which is envisaged as a socio-political platform, with “no political role”, will have representatives from all Naga tribes.

The Naga armed groups will stand disbanded after the accord and the non-state armed militia who are eligible will be absorbed in central or state forces. Those who are not eligible will be rehabilitated by the government.

The accord also promises the removal of AFSPA from Nagaland as a logical consequence of these actions.

The accord does not involve any change in the boundaries of the states, thereby allaying fears in Manipur about the deal. It preserves the paramountcy of the Manipur state government while providing for an autonomous Naga territorial council in the state.

Besides Manipur, there will be an autonomous Naga territorial council in Naga-majority areas of Arunachal Pradesh but not for Assam. The accord also provides for a common cultural body for Nagas across states which will be statutory in nature. This body, which is envisaged as a socio-political platform, with “no political role”, will have representatives from all Naga tribes.

The more substantive issue before the Centre pertains to fears of a violent reaction in Manipur Valley where there is a genuine sense of insecurity about the deal.

The Centre and Manipur government are exploring ways to assure residents of Manipur Valley (which has 60% of state’s population with 10 percent of state’s land) that their land will be secure.

As of now, while anyone can buy land in the Valley, the sale of land is restricted in the hills, an area dominated by Nagas. A law for Manipur restricting the sale of land in the Valley could be announced simultaneously with the signing of the accord.

Continue Reading

Also In The News