Economic Change, Urbanisation and Regional Disparities

Economic growth changes more than incomes

India is an emerging country whose rapid economic growth has changed employment, public services and where people live. Manufacturing and service activities have expanded, while agriculture's share of employment has fallen: by 2019, agriculture employed about 43% of India's workers.

These changes help explain three connected outcomes: changing fertility and death rates, increasing urbanisation, and differences between more prosperous and less developed regions. Growth does not reach every place equally, so improving national conditions can coexist with large regional inequalities.

Why death rates and fertility rates change

Economic growth can raise household incomes and provide more resources for healthcare, clean water and better diets. Better nutrition strengthens health, while safer water reduces the spread of waterborne disease. More accessible healthcare helps prevent and treat illness. Together, these changes contribute to falling death rates and improved survival, especially among infants.

In India, infant mortality fell from approximately 137.9 deaths per 1,000 live births in 1970 to 25.5 in 2022. Life expectancy—the average number of years a newborn is expected to live—rose from 48.2 years in 1970 to 67.2 years in 2021. These indicators show improving survival, although progress has varied between regions.

Fertility measures childbearing rather than deaths. India's total fertility rate fell from 5.6 children per woman in 1971 to 2.0 in 2023. Several changes associated with development help explain this decline:

• Greater access to education gives women more choices about employment and family size.
• More employment opportunities can encourage people to delay starting a family.
• Access to contraception and family-planning education allows people to plan the number and timing of births.

India's government began family-planning programmes in 1952, so economic growth is not the only influence on fertility. Policy and access to services also matter. Lower fertility does not mean that the population immediately starts shrinking: births can still outnumber deaths.

Why towns and cities grow

New factories, offices and services create urban employment opportunities. These act as pull factors, attracting people from rural areas. Better access to education and healthcare can also make cities attractive. Conditions that encourage people to leave the countryside are push factors: in Bihar, recurring floods hamper development and can encourage migration.

Rural–urban migration increases city populations. Cities also grow through natural increase, when births exceed deaths among people already living there. Urbanisation occurs when the urban population grows faster than the rural population, increasing the urban share of the country's population.

In 2021, about 34% of India's population lived in urban areas. Delhi attracts people from rural areas looking for work. This movement connects urban growth with changes in the countryside: departures can reduce the working population of places such as Bihar.

Why economic growth creates regional disparities

Investment often concentrates in places that already have good transport, communications, workers and markets. Businesses benefit from locating near other businesses and customers. New jobs attract migrants, and spending by workers supports more shops and services. This can reinforce growth in a core region.

A periphery region may find it harder to attract investment because infrastructure is poorer and economic opportunities are more limited. Outward migration can further reduce its available workforce. In India, Delhi illustrates an urban core, while Bihar illustrates a rural periphery. These are economic roles, not simply labels for the geographical centre and edge of a country.

The following case-study comparison shows that regional differences involve health and education as well as income. The figures are a regional comparison, not a claim about current values.

Delhi's higher literacy and life expectancy are consistent with better access to education and healthcare. Bihar's poor infrastructure makes investment harder to attract, while recurring floods disrupt development. These connections help explain the disparities rather than merely describe them. However, a comparison of indicators alone cannot prove which factor caused each difference.

Calculating differences from the mean

A mean provides a benchmark against which regions can be compared. Using the two literacy rates above, first add the values and divide by the number of regions:

$$\text{Mean literacy rate}=\frac{86.21+69.83}{2}=78.02\%$$

Then subtract the mean from each regional value:

$$\text{Difference from mean}=\text{regional value}-\text{mean}$$

For Delhi, $86.21-78.02=+8.19$ percentage points. For Bihar, $69.83-78.02=-8.19$ percentage points. Delhi is therefore above this mean, while Bihar is below it. The full gap between the two regions is $16.38$ percentage points.

This is an unweighted mean of two regional values: each region counts equally, regardless of population size. It is not India's national literacy rate. When transferring the method to another dataset, use the regions and benchmark specified, compare the same indicator, and keep its units. For income data, the difference would be expressed in currency per person rather than percentage points.

Demographic change

• Higher incomes, better diets, cleaner water and improved healthcare contribute to lower death rates and infant mortality, and longer life expectancy.
• Education, employment opportunities, contraception and family planning contribute to lower fertility.
• India: total fertility rate fell from 5.6 in 1971 to 2.0 in 2023; infant mortality fell from 137.9 per 1,000 live births in 1970 to 25.5 in 2022.

Urbanisation and regional inequality

• Urban jobs pull rural migrants towards cities; rural difficulties can push people away.
• Migration and natural increase cause city growth. Urbanisation means a rising urban proportion.
• Delhi core: concentrated jobs, investment and services; attracts workers.
• Bihar periphery: poor infrastructure and recurring floods hinder development; outward migration reduces its workforce.
• Delhi has higher literacy and life expectancy, and lower fertility and death rates, than Bihar in the case-study comparison.

Differences from the mean

$$\text{Mean}=\frac{\text{sum of values}}{\text{number of values}}$$ $$\text{Signed difference}=\text{regional value}-\text{mean}$$

Positive = above the mean; negative = below it. Use the correct units and distinguish a mean of selected regions from a national average.