By AP Sinha – Director, Farlense Group, Ritwik Bahuguna – Director, Farlense Group and Ishani Sharma – Research Associate, Farlense Group
India stands at a critical juncture where rapid urbanisation is reshaping its cities and impacting the nation’s future. The population, projected to reach 1.67 billion by 2050, is not only growing but the distribution of that population is shifting dramatically.
Rapid Urbanisation
By 2023, approximately 37% of India’s population resided in urban areas. This figure is expected to soar to nearly 50% by 2050, an increase of 30 crore people.This is not merely a statistic but a call to action. It signals profound changes in how India’s resources, infrastructure, and policies must adapt to an urbanised future.
Currently, urban per capita income exceeds rural incomes by about 140%.This income disparity translates into urban populations spending nearly 75% more than their rural counterparts.By 2049-50, this gap is expected to widen to 83%, with urban monthly consumption expenditure projected at Rs 5,582 compared to Rs 3,044 in rural areas.Such disparities reflect the increased purchasing power and demands of urban residents, ranging from infrastructure and education to housing and beyond.
Strain on Urban Infrastructure and Employment
With an unprecedented rate of urbanisation, cities are struggling to keep up with the challenges of absorbing a massive migration boom. Overcrowded public transport and inadequate sanitation facilities are common sights, while a lack of affordable housing has led to the proliferation of slums and informal settlements in many urban areas.
Employment remains another critical challenge. Urban unemployment hovers at 6.7%, significantly higher than the rural rate of 4.2%.This mismatch between population growth and job creation underscores the need for more robust economic planning. Similarly, urban schools are grappling with overcrowded classrooms and limited resources, jeopardizing the promise of urbanization as a driver of progress.
Increased Food Demand
Urbanisation’s impact is perhaps most pronounced in food consumption. Urban households spend significantly more on food than their rural counterparts. The 2022-23 household consumption expenditure survey reveals that urban monthly per capita food expenditure stands at Rs 2,530, a notable 45% higher than the Rs 1,750 spent by rural households.
Evolving Urban Dietary Patterns
The demand for food is not just about quantity but also diversity. Urban diets are becoming more varied, with greater spending on non-cereal foods like edible oils, vegetables, fruits, dairy products and processed foods.
Back in 1999-2000, 74.3% of total food expenditure in urban areas was allocated to non cereals. This trend continued to grow steadily, reaching 85.32% in 2022-23.Projections for 2049-50 suggest that non-cereal items will dominate urban food budgets even further, making up somewhere around 90% of total food spending, after adjusting for the minimum dietary requirement of cereals and price estimates for staple grains.
These changes, driven by higher incomes and evolving lifestyles, put immense pressure on agriculture to diversify and meet urban tastes.
Shrinking Agricultural Workforce
This shift in food consumption patterns is occurring at the same time when the share of the workforce employed in agriculture has been steadily declining. In 2011, over half (54.6%) of India’s workforce was engaged in agriculture.By 2023, this number fell to 46.1% and is projected to plummet to 30% by 2050.This means fewer farmers will shoulder the responsibility of feeding a growing urban population. By 2050, one farmer will need to produce enough to feed 2.74 urban dwellers, up from the current 1.9—an increase of 45%.
This rapid decline, coupled with the ageing farmer population, signals a looming crisis in food production, leaving an enormous gap in India’s ability to produce food for its expanding urban population. This indicates the dire need for not only enhancing productivity but also diversifying and implementing modern solutions to agricultural issues – a concern given the risk-aversing and change-resistant attitude of older farmers.
The Way Forward
India must act decisively. To tackle the challenges of urbanisation and its impact on food demand, a more nuanced approach is required. First, the agriculture sector needs to focus on improving productivity through the adoption of modern farming techniques, such as precision agriculture and biotechnology, while also encouraging diversification into high-value crops to cater to urban dietary shifts.
Addressing infrastructure constraints through better logistics, cold chain facilities, and distribution channels will not only mitigate food wastage but also ensure that supply chains can meet the demand of increasingly urbanised populations. On the employment front, there is a need to boost job creation in the agri-tech and food processing industries by incentivising investment in these sectors, which can help absorb the growing urban workforce. The creation of supply chain logistics for the increased and diverse food demands of urban populations can help in creating these job opportunities, albeit in part only.
Another critical factor is the growing impact of climate change, which threatens agricultural productivity and food security. Building climate resilience in the agriculture sector is essential, including promoting climate-smart practices, improving water-use efficiency, and adopting renewable energy solutions. Policymakers must also prioritise developing early warning systems and insurance mechanisms to safeguard farmers from climate-related risks.
While rapid urbanisation poses significant challenges, it also offers opportunities for innovation and growth. By leveraging modern technology, fostering investment, and implementing sustainable practices, India can navigate this transformative period and ensure a balanced path forward for both urban and rural communities. The time to act is now.
(The authors are AP Sinha – Director, Farlense Group, Ritwik Bahuguna – Director, Farlense Group and Ishani Sharma – Research Associate, Farlense Group, and the views expressed in this article are their own)
