Importance of Effective Policies to Manage Urban Poverty

Many of the good things that happened in India, have happened in cities. Many social and medieval issues have been effectively broken in the cities. Cities provide an opportunity to remodel India based on good principles. Cities are central to inclusive growth of an economy. They improve the economic condition by unleashing the investments and offering many opportunities to its citizens. Though urbanization is associated significantly with economic growth, it has also been linked with larger numbers of urban poor and urban poverty in less developed countries like India. However, economic growth is quite impressive in some cases, it has not created adequate civic amenities and employment opportunities for the poor migrants in urban areas or cities.

The increasing pressure on the agricultural land and slow social and economic development is forcing rural poor and the unskilled to urban areas in search of employment or livelihood. The United Nation’s ‘World Urbanization Prospects Report-1996’ estimated that 30 percent of the world’s poor people lived in urban areas in 1996, and this was projected to reach 40 percent by the year 2020, and 50 percent by 2035 (half of the world’s population). McKinsey Global Institute reported that around 340 million people already lived in urban India in 2008, representing nearly 30 percent of the total population. It also stated that nearly 590 million people will live in cities by 2030.

Many factors including the city planning, irregularities in land markets, issues of implementation, regulatory and institutional, all have aggravated the urban poverty. According to Asian Development bank 2008a, 16 major Asian economies including India are below the Asian poverty line standard ($1.35 per day). McKinsey Global Institute reported that around 75 percent of urban citizens live in the bottom income segments, earning an average of Rs.80 (around $1.80) a day.

There is a need to recognize the severity of the problem and focus attention on reducing urban poverty particularly in cities like Hyderabad, where a lot of people from rural areas are shifting in the recent times. A latest McKinsey report estimates that Hyderabad will have a population of around 1 crore (98 lakhs) in 2030. With the growing urban population, the cost of not paying attention to urban poverty will be enormous. The urban poverty in the coming years would depend on how successfully poverty reduction policies are implemented. The aim should be to integrate the urban poor into the Hyderabad urban development process by giving them access to employment, developing their productive assets and providing them basic services and infrastructure thereby improving their quality of life.

Though urban poor in Hyderabad are relatively similar in nature, they represent different groups with diverse poverty and vulnerability characteristics and levels. Depending on the changing economic conditions, they move in and out of poverty. Appropriate strategies and interventions should be developed to address this variable nature of their poverty situation.

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