Dainik Bhaskar Unmetro: Tapping into small town India

The potential for growth is undisputed. But the metros and small towns have developed in a way that is uniquely Indian.

Kicking off the first Dainik Bhaskar Unmetro conference in Gurgaon, Pradeep Dwivedi, chief corporate sales and marketing officer, Dainik Bhaskar emphasised that new India resides in small towns, and long term growth will come from the country's Tier II markets. The event was organised by afaqs!.

"Urban centres in the country act like a magnet that attracts talent and wealth but this creates its own pitfalls as well. Mishaps like the global financial crisis tend to have a bigger effect on the metros than on smaller towns," Dwivedi pointed out.

He challenged the assumption that the metros still rule the roost. Giving an example, he said that large numbers of stock investors now come from the non-metros and they prefer to watch the news in their language rather than in English, which is generally assumed to be the language of choice for this class. He also took a refreshingly relevant view on digital, stating that print and digital are going to be the best media through which a small town resident can be reached.

Dwivedi's opening remarks were followed by a presentation made by economist Laveesh Bhandari, who is also director, Indicus Analytics. In a presentation titled 'The rise and rise of Unmetro India. The story in numbers', Bhandari began by questioning the very definition of the term 'metro'. What was the basis for deciding that one city deserved to be called a metro and another didn't? He brought the fundamentals of the issue into question by saying that the loose term is often used as a suffix for cities that don't deserve it.

"No one actually knows how many metros are there in India. For instance, why is Kolkata a metro, and Pune not? Is Ahmedabad a metro? I would say that Surat and Nagpur are more cosmopolitan than Ahmedabad," Bhandari said.

Bhandari added that India stood very uniquely placed as compared to the rest of the world, as in many other countries, metro cities drive growth, whereas in India, it is the other way around. Other peculiarities include migration in India, which is lower than in other countries with a similar level of development; also, metros are spread across the country unlike, say, China, where they are concentrated in just one region. Bhandari reasoned that relatively lower government spending on metros may be a reason why the infrastructure is poor which, in turn, is attracting fewer migrants than it otherwise might have.

"People nowadays are migrating from smaller towns to cities like Pune, Lucknow and Ahmedabad to earn their livelihood, whereas the rate of people migrating to the so-called metros has fallen sharply," he added.

Presenting some numbers, Bhandari said that the 7783 towns quoted by a study in India, while a seemingly high number, was actually a below par number, when compared on parameters like total population and area with other countries.

Highlighting the problems faced by smaller towns in the country, Bhandari said that issues such as limited infrastructure, electricity, lack of public space and difference in income levels have so far hampered their growth. Each of these factors has led to a chain of consequences, he explained.

For example, because smaller towns have poor roads, people don't buy cars even if they have the money to do so. Even when they do buy four-wheelers, they prefer to go around on two-wheelers because of congestion. Because roads are poor and traffic is awful, people would rather go to the local kirana store on their motorcycle rather than travel a distance in their car to a large outlet.

According to Bhandari, in earlier days, the rich resided in the big cities even if their land and other interests were in small towns and rural areas. This is no longer the case. The affluent no longer see any reason to leave their towns and migrate to the metros.

"Today, if a Delhi grows, a Gurgaon and a Noida will also grow simultaneously. This has been typically the trend in India, where, unlike other countries, a bigger city has not been able to diminish the significance of a smaller town nearby. Small towns don't die out in India," he added.

He quoted the example of power shortages to highlight the impact on key categories. Thus, while television has a very high penetration in the country, refrigerators don't, with its own related consequences on purchase decisions for groceries, for instance.

Poor urban planning has also led to lack of quality public spaces, with its unintended consequence of encouraging ghettoization or haphazard markets for key unorganised sector service providers like locksmiths, small jewellers and street food.

Bhandari concluded with a positive note on the vast potential for growth and products in these markets, saying that this trend of co-existence between metros and non-metros will continue and the role of the smaller towns in shaping the economic growth of the country will become more critical in the future.