“Dull, inert cities, it is true, do contain the seeds of their own destruction and little else. But lively, diverse, intense cities contain the seeds of their own regeneration, with energy enough to carry over for problems and needs outside themselves.” – Jane Jacobs

By most accounts, Indian cities exemplify Jacobs’s description of ‘lively’, ‘diverse’, and ‘intense’. There is a greater socio-cultural diversities in our cities with strong forces of assimilation and integration. Collectively, people in Indian cities contribute a far higher share in the country’s GDP than what their share in the national population. More than one study has confirmed the existence of ‘agglomeration economies’. This means that firms and people show higher productivity in cities. By 2050, India is likely to add 416 million population to the world’s urban population vis-à-vis 255 million for China. India’s rural population is likely to come down by a few million during the same period. All of these underline the status of Indian cities as the true ‘engine of growth’. Yet, Indian cities miss one thing that most other engines have – ‘a check engine light’.

In other words, there are very few tractable indicators of the economic activity in a city. The Central Statistics Office (CSO) releases all India GDP data disaggregated by rural and urban areas for selected years. There are a few other estimates available from private agencies and researchers but these are again either aggregate urban estimates, or one-off exercises. The lack of this critical data point has led the Ministry of Housing and Urban Affairs (MoHUA) to appoint a team under Technical Assistance for Smart Cities (TASC) to conduct the following activities:

•Explore the availability of suitable data at the national, state and city level which can be used to
estimate city level GDP;
•Develop a framework to estimate city level GDP based on available data sets; and
•Estimate city GDP and adjust it suitably to reflect spatial productivity differences.

Several stakeholders are expected to benefit from these estimates including policymakers and planners, private sector and citizens and researchers. Policymakers will be able to use this data to plan for future infrastructure investments and raise finances for the same. The private sector will be able to use this data to complement public investment, strategize business decisions. They will also be empowered to identify ‘emerging city economies’ – i.e. future investment destinations, beyond the usual metropolitan suspects. Citizens may use this data to make migration decisions, and academicians and researchers will be able to exploit the data to undertake critical research in urban economics and planning. It would also foster a spirit of competition amongst the cities. Our cities are on a path of prosperity except that the economic progress remains unmeasured. We have made a benign attempt to generate annual city GDP statistics with the release of this framework document while recognizing the fact that it may be challenging.

This consultation paper presents the draft framework developed by the TASC, for city GDP estimation. We would like to invite your feedback/ suggestions/ recommendations on the proposed framework, using the feedback link provided on http://smartnet.niua.org/city-gdp or on MyGov by 31st March, 2019. We look forward to your participation in this journey.

Click here to read Consultation Paper on City GDP Measurement Framework