Cities As Engines of Inclusive Development

This paper argues that the recent policy rhetoric towards cities in India has been shaped by their increasing economic importance in national output generation, as well as a series of prominent global reports on the role of cities in driving growth. Policymakers have responded to this, designing urban programmes that focus on removing productivity bottlenecks, and simultaneously relegating concerns of redistribution to the rural sector. This paper argues for a shift in the policy rhetoric from viewing cities as ‘engines of growth’ to ‘engines of inclusive development’. Policymakers need to focus on the role of employment generation in order to achieve growth as well as poverty reduction in urban areas, and there needs to be greater emphasis on linking macro dynamics like urbanisation, employment generation and economic and human development. The paper uses an existing analytical tool, the urban rural growth differential, in a new way to measure the difference between employment generation in urban and rural areas. It highlights that female workforce participation is potentially a key future driver of changing urban employment trends. Finally, it offers a set of directions for governance and industrial policy in order to enable this transition to occur, and provides a set of questions for further research.