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Interdependencies of Internal Migration, Urbanization, Poverty, and Inequality: the Ac Se of Urban India Edgar J

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Interdependencies of Internal Migration, Urbanization, Poverty, and Inequality: the Ac Se of Urban India Edgar J University of Wollongong Research Online Faculty of Business - Papers Faculty of Business 2019 Interdependencies of Internal Migration, Urbanization, Poverty, and Inequality: The aC se of Urban India Edgar J. Wilson University of Wollongong, [email protected] Kankesu Jayanthakumaran University of Wollongong, [email protected] Reetu Verma University of Wollongong, [email protected] Publication Details Wilson, E., Jayanthakumaran, K. & Verma, R. (2019). Interdependencies of Internal Migration, Urbanization, Poverty, and Inequality: The asC e of Urban India. In K. Jayanthakumaran, R. Verma, G. Wan & E. Wilson (Eds.), Internal Migration, Urbanization and Poverty in Asia: Dynamics and Interrelationships (pp. 109-131). Singapore: Springer. Research Online is the open access institutional repository for the University of Wollongong. For further information contact the UOW Library: [email protected] Interdependencies of Internal Migration, Urbanization, Poverty, and Inequality: The aC se of Urban India Abstract In India, the number of metropolitan cities with a population of around 1 million people and above has increased from 35 in 2001 to 53 in 2011. Around 43% of the urban population resides in metropolitan cities.2 By 2030, the urban population of India is predicted to increase by a total of 163 million, relative to an increase in the rural population by 30.9 million (UN DESA 2014). Unplanned growth in the urban population tends to put pressure on regional/urban disparities and the rapidly increasing slum-dwelling population. In 2011-2012, the headcount ratio (HCR) based on US$ 1.90 per person per day for India is around 21.3%, and the total number of people under this poverty line is 260 million. The urban Gini index increased by nearly 5 points from 34.3 to 39.1, and the urban mean log deviation (MLD) index increased by over 6 points from 19.3 to 25.5 during 1993-1994 to 2011-2012 (World Bank 2015a, b). The gfi ures show a rapid increase in urban poverty and inequality. Disciplines Business Publication Details Wilson, E., Jayanthakumaran, K. & Verma, R. (2019). Interdependencies of Internal Migration, Urbanization, Poverty, and Inequality: The asC e of Urban India. In K. Jayanthakumaran, R. Verma, G. Wan & E. Wilson (Eds.), Internal Migration, Urbanization and Poverty in Asia: Dynamics and Interrelationships (pp. 109-131). Singapore: Springer. This book chapter is available at Research Online: https://ro.uow.edu.au/buspapers/1602 Chapter 5 Interdependencies of Internal Migration, Urbanization, Poverty, and Inequality: The Case of Urban India Edgar Wilson, Kankesu Jayanthakumaran, and Reetu Verma Keywords Internal migration · Urbanization · Poverty · Inequality · Interdependencies · India 1 Introduction1 In India, the number of metropolitan cities with a population of around 1 million people and above has increased from 35 in 2001 to 53 in 2011. Around 43% of the urban population resides in metropolitan cities.2 By 2030, the urban population of India is predicted to increase by a total of 163 million, relative to an increase in the rural population by 30.9 million (UN DESA 2014). Unplanned growth in the urban population tends to put pressure on regional/urban disparities and the rapidly increasing slum-dwelling population. In 2011–2012, the headcount ratio (HCR) based on US$ 1.90 per person per day for India is around 21.3%, and the total num- ber of people under this poverty line is 260 million. The urban Gini index increased by nearly 5 points from 34.3 to 39.1, and the urban mean log deviation (MLD) index increased by over 6 points from 19.3 to 25.5 during 1993–1994 to 2011–2012 (World Bank 2015a, b). The figures show a rapid increase in urban poverty and inequality. Studies in India show some mixed results. Urbanization is a product of poverty- induced rural-urban migration, and it is due to urban pull and rural push (Datta 2006). Migration for employment from rural to urban areas emerges as a major tool for poverty alleviation (Kundu and Mohanan 2009). Urbanization has a systematic 1 The views/findings in the study do not necessarily reflect the views of the Government of India. 2 Shrinivasan, R. and Chhapia, H. (2011), Delhi topples Mumbai as maximum city. The Times of India, India: Bennett, Coleman & Co. Ltd. Retrieved 28 February 2017. E. Wilson · K. Jayanthakumaran (*) · R. Verma School of Accounting, Economics and Finance, University of Wollongong, Wollongong, NSW, Australia e-mail: [email protected] © Asian Development Bank 2019 109 K. Jayanthakumaran et al. (eds.), Internal Migration, Urbanization and Poverty in Asia: Dynamics and Interrelationships, https://doi.org/10.1007/978-981-13-1537-4_5 110 E. Wilson et al. and strong association with poverty reduction in neighbouring rural areas (Cali and Menon 2009). Urban to rural remittances appear to be particularly important in the well-being of the poorest states in India (Castaldo et al. 2012). The positive impacts of migration improved the status of migrants of both urban and rural households. However, these positive impacts come at a cost. The cost involves the risks of injury, exposure to disease, and long periods of separation from family (Deshingkar 2010). In general, despite the importance of the rate of urbanization and its link to urban poverty and urban inequality (Jack 2006; Satterthwaite 1997), it is surprising that existing research only pays attention to each dimension in isolation.3 Accommodating appropriate models to explain the link is challenging. Thus, the objective of this paper is to systematically address the research gap between the dynamic links of internal migration, urbanization, and the poverty nexus in India. The remaining sections are organized as follows: Section 5.2 explores the trends and patterns of internal migration, urbanization, poverty, and inequality. Section 5.3 describes the methodology of stationarity testing and explains the data, followed by a cointegration time series analysis for a long period and a special state panel generalized method of moments (GMM) estimation at the state level. Section 5.4 discusses the results. Section 5.5 provides some conclusions related to the iden- tified interdependencies. 2 Trends and Patterns India shifted to a higher growth path trajectory in the 1990s based on the strength of its economic reforms in 1991 and the acceleration of further economic reforms in 2000s. Since the reforms, yearly growth was on average above 5%. Economic reforms caused structural changes in the Indian economy: a slowing agricultural sector, a rising services sector, and increasing regional disparities. Growth in the agricultural sector has fallen from 24% in 2000 to 14% in 2012, while growth in the service sector has improved from 49% to 58%. There was a slight increase in the manufacturing sector. Regional differences have also increased, for example, the per capita gross domestic product (GDP) ratio of the wealthy Indian state (Punjab) to the poor, populous state (Bihar) rose from nearly 3:1 in 1980 to over 4:1 in 2010. Urbanization is also a consequence of the structural change from agriculture to the industrial and service sectors, which may be noted as the increased share of the national population residing in urban areas. Indian censuses indicate that urban population has increased by 91 million whereas urban population share has grown from 28% (286 million) in 2001 to 31% (377 million) in 2011. Rural population has increased by 90 million whereas rural population share has fallen from 72% (743 million) in 2001 to 69% (833 million) in 2011. This can be considered rapid 3 For example, Carlsen (2000) shows some important empirical implications of the amenity and matching models and studies the regional pattern of migration, unemployment, and wages in Norway. The results confirm the matching model. 5 Interdependencies of Internal Migration, Urbanization, Poverty, and Inequality… 111 urbanization, and the increase in urban population is due to the increase in natural growth rate, increase in in-migration, extension of city limits, and reclassification of areas from rural to urban. Urban migration from rural areas is an important compo- nent in determining urbanization. According to national sample survey (NSS) data (55th and 64th rounds), the number of rural-urban out-migrants increased by around 42 million (24%) from 175 million in 1999–2000 to 217 million in 2007–2008. The presence of circular migration flows (the returning periodic urban to rural migra- tion) makes it difficult to determine the actual statistics of migration. Regardless of the aforementioned complications of migration, Fig. 5.1 shows the reality of actual net migration to urban areas. Positive net urban migration highly influences the overall urban population, although net migration has experienced considerable variation during the study period. Urban population growth in the 1970s stagnated in the 1980s and 1990s and then accelerated in the later part of the 1990s and early 2000s. Since the late 1990s, the urban population has experienced steady increases overall. Rapid urbanization has consequences for urban poverty and income inequality. Hugo (2014) finds three possible linkages between urbanization and poverty: falling poverty rates in both rural and urban areas, significantly lower poverty rates in urban than in rural areas, and increasingly urban issues. For India, the pattern of change in the HCR and the increase in the slum-dwelling population indicate that poverty is becoming an increasingly urban issue. Applying the $1.90
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