The rise of non-metros

COVID-19 crisis and consequent reverse migration poses infrastructure challenges and offers growth prospects as well

December 05, 2020 09:50 am | Updated 10:45 am IST

Representational image from Mysore.

Representational image from Mysore.

The Vestian white paper ‘Non-metros Rising: Holding on to the Reverse Migration’ has observations on factors that advocate the impending shift towards the non-metros and other smaller cities - the development augmented by the COVID-19 crisis, and whether these cities would be able to sustain this reverse migration through the generation of enough employment.

Says Shrinivas Rao, CEO – APAC, Vestian, “India today is at the cusp of witnessing a new era of growth frontier – cities that are emerging from the towering presence of the bigger metros. Factors such as increasing aspirations, affordability, improved road, and air connectivity, the growth of local industries, and other conducive aspects would contribute towards strengthening the pulling factors in these regions. While there are challenges galore, with the implementation of good city governance policies and development plans, it is not an unachievable task."

Key takeaways

Population influx - India’s population is expected to grow by 25% (compared to 2011) to 1.52 billion by 2036, according to the National Commission on Population under the Ministry of Health and Family Welfare. As the country continues to grow, factors such as rising disposable income and better infrastructure are also likely to lead to higher consumption and purchasing power in the non-metros and other smaller cities, thereby leading to faster growth.

Urbanisation rate - The pace of urbanisation has been rapid in the country, leading to aspirations from the smaller cities match with those of the metros. The growing number of internet users in smaller non-metro cities has today blurred the lines between the inclination of these small-town consumers and people living in larger cities.

Government impetus - Various government projects (Smart Cities Mission, UDAN, Atal Mission for Rejuvenation, etc) are underway, aimed at augmenting the growth of smaller cities, modernising and equipping them technologically. Employment opportunities have improved and new avenues have opened up for more job profiles.

COVID-19-led disruption - While it is still some way off to see people return/migrate to these smaller cities from the metros in vast numbers, the COVID-19 outbreak has exposed just how susceptible the metro cities are to such events, shifting the focus growth to non-metro cities.

The pull-factors - The job markets in the non-metros have shown positivity post the lifting of lockdown, and factors such as government relaxing rules to enable Work-From-Home, an increased impetus to e-commerce growth and manufacturing, a strengthening start-up culture, et al, would contribute towards smaller cities, apart from lower cost of setting up a business and relatively cheaper manpower and real estate costs. Presently, there is a fair amount of IT/ITeS sector presence in smaller cities such as Visakhapatnam, Indore, Mysuru, Kochi, Chandigarh, and Coimbatore

Reverse migration-led housing demand - With WFH becoming permanent in some IT/ITeS companies and the government relaxing WFH rules, residential demand is expected to be favourably impacted in the non-metros and other smaller cities.

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