India’s Silent Urban Transition: The Rise of Small Towns in an Era of Capitalist Stress

 

India’s Silent Urban Transition: The Rise of Small Towns in an Era of Capitalist Stress

India’s urban imagination remains dominated by megacities such as Delhi, Mumbai, Bengaluru and Hyderabad. Yet, a deeper structural transformation is unfolding away from these metropolitan centres. Of nearly 9,000 census and statutory towns, fewer than 500 qualify as large cities. The overwhelming majority are small towns with populations below one lakh. Their rapid proliferation is not accidental; it is a product of India’s evolving capitalist development and the emerging crisis of metropolitan accumulation.

From Metropolisation to Peripheral Urbanisation

Between the 1970s and 1990s, India’s growth model relied on metropolisation. Large cities became sites of industrial clustering, infrastructure investment, labour absorption and consumption. They functioned as “spatial fixes” for capitalism, absorbing surplus labour and capital.

However, this model has reached limits:

• Land prices have become speculative and disconnected from productive use

• Infrastructure is overstretched

• Cost of living has outpaced wages

• Informal settlements and congestion have intensified

This condition of over-accumulation has pushed capital and labour outward, giving rise to a new geography of growth: small towns.

The New Role of Small Towns

Across regions — from Sattenapalle and Barabanki to Hassan, Bongaigaon and Una — small towns are emerging as:

• Logistics and warehousing hubs

• Agro-processing centres

• Construction and real estate nodes

• Service and consumption markets

They absorb migrants displaced from metros and rural youth facing agrarian stagnation. Thus, small towns are not peripheral to urbanisation; they are its new frontier, shaped by cheaper land, flexible labour, weaker regulation and limited political visibility.

Myth of Inclusive Urbanisation

Contrary to optimistic narratives, small towns do not automatically ensure equitable development. Instead, they are witnessing the urbanisation of rural poverty:

• Dominance of informal labour without contracts or social security

• Women concentrated in home-based piecework

• Youth trapped in gig and platform economies

• Rise of intermediary elites controlling land, credit and labour

Rather than dismantling inequality, new hierarchies are crystallising.

Policy and Governance Deficit

India’s urban policy architecture remains metro-centric:

• AMRUT, Smart Cities Mission, Metro Rail Policy prioritise large cities

• Small towns receive fragmented water, sewerage and transport investments

• Tanker economies, groundwater depletion and ecological stress intensify

• Municipalities lack technical capacity, finances and planning autonomy

• Participatory planning is procedural, not substantive

This disconnect reveals a mismatch between India’s actual urban future and its planning imagination.

Reimagining the Urban Future

A new paradigm is required:

1. Political Recognition
   Small towns must be acknowledged as the main arena of 21st-century urbanisation.

2. Context-Sensitive Planning
   Integrated town-level plans linking housing, livelihoods, mobility and ecology.

3. Empowered Local Governments
   Fiscal devolution, professional staffing and democratic participation.

4. Regulation of Capital and Platforms
   Labour rights, environmental safeguards, data governance and local value capture.

Conclusion

India’s urban transition is no longer metropolitan alone; it is increasingly small-town driven. These spaces represent both opportunity and risk. Without institutional reform, they may become sites of informalisation, ecological degradation and social exclusion. With conscious planning and democratic governance, however, they can emerge as engines of balanced regional development. The challenge before policymakers is to shift from a megacity-centric imagination to a polycentric, inclusive and sustainable urban vision.