4. Structural Changes and Implications for Urbanization

In order to establish the linkages between non-farm employment growth, urban growth and the changing settlement morphology at the state level, urbanisation process in Gujarat is examined in detail in the fourth chapter. Structural transformation embodies rising rural incomes and growing demand for non-farm services that play a role in bringing about the growth of RNFS. Scholars also argue that structural transformation is a consequence of urban spill over to rural non-farm ‘self-employment’ activities. Small towns are defined as ‘first-tier markets and service providers for rural enterprises and development’ and originate as villages that due to agglomeration economies develop over time as urban centres by virtue of their functions and services. Economic development and urbanization are thus related. This chapter deals with the nature of urbanization process in India with particular reference to Gujarat. With the help of secondary data for the towns of Gujarat, it explores the relationship between the emergence of census towns and the pre-existing metropolitan areas. The constituents of urban growth in Gujarat are decomposed in order to unravel the contribution of census towns and in-situ urbanisation. An attempt is made at identifying the factors that determine the emergence of small/census towns in Gujarat, keeping the district as the enumeration unit. The magnitude of the future development challenge faced due to unrecognized urbanization is ascertained by looking at the status of large villages that are on the threshold of being defined as urban. By relaxing the definition of an urban centre, the challenges of urban growth process are discussed. The last section provides a summary of discussion and highlights issues critical for policy support.