New Delhi, Oct. 30 -- There is a tangible buzz in the air every time you visit a tier II or III city in India. Be it Indore, Dehradun, Coimbatore or Pune, the energy, movement, and consumption rivals the top six metros. For the last few years, corporate focus has been looking beyond the crowded metros. And understandably so. Ideas, talent, and spending power seem to be comfortably tucked into newer Indian hubs, just waiting for an outlet. Bharat beyond India has been shaping up, and as already seen in developed nations decades earlier, their impending future holds a myriad of opportunities for our smaller towns.
A recent report by People Research on India's Consumer Economy (PRICE) and Tata Sons titled, "The Many Urban Indias", confirms that several tier II and III cities are emerging as strong competitors to large cities and in some instances, even outshining them. The report notes that Delhi, Mumbai, Bengaluru, Hyderabad, Chennai, and Kolkata, with more than 10 million people, earns the most, saves the most, and is one of the highest drivers of consumption, but surprisingly not the top one. While the larger cities occupy 46 per cent of India's consumption, the most spending per household happens in Chandigarh, while astonishingly, homes in smaller cities such as Amritsar, Ahmedabad, and Jabalpur spend more than Mumbai! 100 cities in India fuel USD 844 billion in consumption every year. If taken together, they'd account for the 14th largest consumption market in the world, after Turkey and South Korea, and ahead of Indonesia.
The statistics in the report decipher earning, spending, and saving patterns, influenced by economic activity and tinged with demographic tastes. The blossoming of new centres of buying power comes as a fresh lease of life to our over-strained metros that struggle to accommodate millions. Broken roads, noxious air, water scarcity, sound pollution, sky-high rents - living in the metros is becoming more expensive and unaffordable for many. Now imagine what viable living in the new hubs can offer - affordable housing, clean environment, psychological comfort of being in one's own roots. Surat, Cuttack, Kozhikode, Kalaburagi - today, life and livelihood could be anywhere.
There is little doubt that the largely untapped tier II and III markets are incredibly exciting for the brands and services. Life in the non-metros has a lot going in its favour - people are earning well, standard of living is better, and air is cleaner. Large companies and startups are increasingly finding value in setting base or satellite offices in smaller towns, moving out of the overstressed Indian metros. Talent is aplenty with younger folk getting the option of working close to home. India's middle economy is expanding, and the lines between rural and urban India blur with every passing year. But with this opportunity come challenges as well. The report interestingly also points out the growing debt burden of mid-tier cities, with an increase in urban household debt to 65 per cent from 54 per cent in the last 10 years. Worryingly, only 11 per cent of urban families pay for health insurance while 22 per cent have had hospitalisations; 4 per cent of them become financially stressed due to mounting medical expenditure.
Any kind of hectic economic activity is positive for a region. But when we look at how ramshackled most of our existing cities are, one thing hits us square in the face. We need to plan our emerging cities better with affordable housing, safe roads, reliable public transport, and breathable air. There are already reports doing the rounds of smaller cities getting water-stressed due to the sudden boom in data centres. Progress can't come at the altar of sacrifice of our health. We definitely don't want to take our largely idyllic towns and turn them into carbon-spewing gas chambers. Along with excitement, vulnerabilities are also showing up. Therefore, while it's intriguing that several new cities hold massive growth potential, we will also need to be mindful of the growth trajectory that they will follow. We must get it right.
Views expressed are personal. The writer is an author and media entrepreneur
Published by HT Digital Content Services with permission from Millennium Post.