Analyzing Urbanization Trends in India by Settlement Size

India is one of the fastest urbanizing nations on the planet, and the story of that urbanization is not just about cities getting bigger – it’s about which cities are growing, and why. When you look at how India’s urban population has distributed itself across settlements of different sizes over the past century, a clear pattern emerges: the country’s urbanization has been dominated by large cities, with smaller towns increasingly left behind. Understanding this pattern – and what it means for planning, infrastructure, and equity – is central to understanding India’s urban future.

How India classifies its urban settlements
The dominant trend: Class I city growth
Why large cities attract disproportionate growth
The role of rural-urban migration
Regional primacy and urban concentration
The stagnation of smaller towns
Implications for urban planning
Pressure on large cities
The need for decentralized and balanced planning
Climate and environmental risks
What a balanced urban future could look like

How India classifies its urban settlements

India’s Census, conducted every ten years, classifies all urban settlements into six size classes based on population. According to the Census framework, Class I cities are the largest, with populations of 100,000 or more. Class II cities have populations between 50,000 and 99,999. Class III cities fall in the 20,000-49,999 range. Class IV cities have between 10,000 and 19,999 residents, while Class V and VI towns are the smallest, with populations below 10,000. This six-tier framework gives planners and researchers a structured way to track where urban growth is actually happening – and where it is not.

The distinction matters enormously in practice. A Class I city like Bengaluru or Pune operates with a completely different economic base, infrastructure level, and planning complexity than a Class IV town in rural Rajasthan or Bihar. Tracking how population has shifted across these classes over time reveals the fundamental character of India’s urbanization.

The dominant trend: Class I city growth

The most striking feature of India’s urbanization trajectory is the overwhelming growth of Class I cities relative to all other size classes. According to NITI Aayog’s report on urban planning capacity, by 2011, 70.2% of India’s total urban population was living in cities with populations over 100,000 – and Class I cities alone accounted for 44.7% of the country’s total urban area. The number of million-plus cities rose from 35 in 2001 to 53 by 2011, a dramatic increase in just one decade.

In historical perspective, the scale of this shift is remarkable. India’s urban population grew from 25.85 million in 1901 to 377.11 million by 2011 – a nearly 15-fold increase over a century. In 1971, there were roughly 150 cities with populations exceeding one lakh (100,000). By 2011, that figure had reached approximately 500. This rapid proliferation of large cities is the defining feature of what scholars call India’s large-city-oriented urbanization pattern.

Research published in the journal Sustainability describes this as a form of “double urbanization” – large and mega-cities growing at a disproportionately fast pace, while villages and small urban settlements decline in relative importance, becoming a minority in the broader settlement system. This trend, the study notes, is particularly visible in India and across other countries in the Global South.

Why large cities attract disproportionate growth

The concentration of population in Class I cities is not accidental – it reflects structural economic and political forces. Large cities offer a concentration of jobs in diversified sectors, including information technology, manufacturing, finance, healthcare, and retail. Urban areas already contribute 63% of India’s GDP, with this share projected to exceed 75% by 2030. Cities like Bengaluru have attracted over a million IT professionals, making them powerful poles of migration.

Infrastructure also plays a self-reinforcing role. Large cities tend to have better hospitals, universities, transport networks, and public services – which in turn attract more people and businesses, generating further growth. The World Bank estimated in 2011 that two-thirds of India’s GDP was generated in cities, and it projected that by 2030, India’s top five cities would have economies comparable to mid-income countries.

The role of rural-urban migration

Rural-to-urban migration is the primary demographic engine driving Class I city growth. Declining agricultural incomes, limited rural employment, and the pull of urban wage opportunities have consistently pushed workers toward large cities. According to World Bank data, urbanization in India increased by more than 4% in the last decade as more people moved away from rural areas. Agriculture still employs nearly half of India’s workforce but contributes a shrinking share of GDP, creating strong economic incentives to migrate.

Importantly, this migration tends to flow to the largest available city within a region, rather than distributing evenly across the settlement hierarchy. This is because the economic returns in larger cities are substantially higher, and social networks in metro areas make them easier entry points for new migrants.

Regional primacy and urban concentration

India presents an interesting case in terms of urban hierarchy. At the national level, there is no single dominant primate city – Mumbai, Delhi, and Kolkata all compete as top-tier metros. However, at the regional level, primacy is clearly present. Delhi dominates the north, Mumbai the west, and Kolkata has historically dominated the east. At the state level, most large states have one dominant urban center that far outgrows the rest of the settlement hierarchy. This regional primacy reinforces the flow of resources, investment, and population toward a small number of Class I cities, leaving smaller settlements relatively underdeveloped.

The stagnation of smaller towns

While Class I cities have boomed, the picture for smaller towns is considerably bleaker. Research published in Demography India (2024) found that India’s urban growth trajectory has shifted backward in recent decades, with an increasing share of stabilizing towns, fewer growing towns, and the emergence of outright declining towns – especially among small and medium-sized settlements. Class II, III, and IV towns together account for just 26% of the total urban population, despite comprising the majority of India’s urban settlements by number.

The reasons are structural. Smaller towns typically lack economic diversification, relying heavily on agriculture, local trade, or small-scale industry. They face significant infrastructure gaps – inadequate roads, poor healthcare, unreliable water and electricity supply – which make them less attractive to both migrants and investors. As research from the University of Pennsylvania’s urban project notes, over half of India’s urban population actually lives in towns with fewer than 500,000 people, yet these places receive disproportionately little research attention, policy focus, and investment compared to metros.

The result is a vicious cycle: fewer amenities in smaller centers drives more people toward large cities, further reducing the economic base and service quality of smaller towns – which then drives even more out-migration. This feedback loop is one of the central structural challenges of India’s urbanization pattern.

Implications for urban planning

India’s large-city-oriented urbanization pattern creates profound planning challenges, both for the large cities absorbing population and for the smaller settlements being left behind.

Pressure on large cities

According to the World Bank, by 2036, India’s towns and cities will be home to 600 million people – 40% of the total population, up from 31% in 2011. Since nearly 70% of the urban infrastructure needed by 2047 is yet to be built, the country requires an estimated $840 billion in infrastructure investment by 2036. Large cities face acute pressures from overcrowding, housing shortages, and environmental degradation. Urban footprints are growing at twice the rate of urban populations, with sprawl accounting for a significant portion of this expansion. Slums are a direct consequence: 108,227 slum blocks have been recorded across 2,543 cities, with about 90% of the estimated urban housing shortage of 18.7 million units falling in the economically weaker sections. As Brookings India has noted, the share of rental housing in urban India fell from 54% in 1961 to 28% in 2011, making affordable housing access even more difficult for new urban migrants.

The need for decentralized and balanced planning

Urban planners and researchers increasingly argue that India cannot sustain a planning model that concentrates resources and attention on a handful of large cities. The Demography India study calls for a holistic, decentralized approach that empowers smaller urban units with adequate infrastructure and economic opportunities, to achieve balanced growth across regions and reduce development inequalities.

The Government of India has attempted to address this imbalance through flagship programs. The Smart Cities Mission, launched in 2015, aimed to develop 100 cities with sustainable infrastructure and smart technology solutions. The AMRUT (Atal Mission for Rejuvenation and Urban Transformation) scheme covers over 500 cities with populations above one lakh, focusing on water supply, sewerage, and basic urban services. These programs recognize that urban development cannot be limited to metros alone. However, critics point out that investment and governance capacity remain heavily skewed toward larger cities, and that the institutional weaknesses of urban local bodies – particularly in smaller towns – limit how effectively these schemes can be implemented.

Climate and environmental risks

The concentration of population in large cities also amplifies environmental vulnerability. Researchers note that over three-quarters of the world’s most polluted cities are in South Asia, and small towns in particular face mounting pressure from water scarcity and extreme heat. The 2023 Delhi floods and 2024 Bengaluru floods illustrate how inadequate urban infrastructure fails to cope with extreme weather – a problem that will only intensify as more people move into cities without corresponding investment in resilient infrastructure.

What a balanced urban future could look like

India’s urbanization does not have to be synonymous with concentration in a few mega-cities. Scholars and policy experts argue that strengthening the second and third tiers of the urban hierarchy – Class II, III, and IV towns – is essential for equitable and sustainable development. This means investing in economic diversification, transport connectivity, and governance capacity in smaller urban centers, so that they can serve as meaningful alternatives to large-city migration. The World Bank has emphasized that building livable, climate-resilient, and inclusive cities will be critical for India’s ambition to become a developed country by 2047. Achieving that goal will require rethinking where urban investment flows – and ensuring that the benefits of urbanization are not confined to a handful of large cities while hundreds of smaller towns are left to stagnate.

What do you think? Given that India’s urbanization is heavily concentrated in large Class I cities, should urban policy prioritize making big cities more livable, or should it focus on developing smaller towns to distribute growth more evenly? And what role should local governments in smaller towns play in reversing the trend of stagnation and population decline?

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Table of Contents

How India classifies its urban settlements 🔗

The dominant trend: Class I city growth 🔗

Why large cities attract disproportionate growth 🔗

The role of rural-urban migration 🔗

Regional primacy and urban concentration 🔗

The stagnation of smaller towns 🔗

Implications for urban planning 🔗

Pressure on large cities 🔗

The need for decentralized and balanced planning 🔗

Climate and environmental risks 🔗

What a balanced urban future could look like 🔗