Poverty in India has been a part of the policy debate right from the First Plan period with the primary focus being on agriculture and rural development. Urban development was tackled through a focus on industry. While social services such as health and education provided for urban population, there remained a concerted focus on rural India in the Five Year Plans, urban poverty was not recognized as a concern in the initial plan periods. The change towards an urban focus is seen from the 7th plan period onwards (1985-1990) with attention to infrastructure, environmental improvement (slum upgrading) and livelihood promotion. Subsequent plans have steadily increased the allocation for urban development and urban poverty alleviation. Most significant is the recent emphasis on urban renewal evidenced through the allocation under JNNURM in the 10th Five Year plan1 which has continued since then. JNNURM is the first attempt at a comprehensive package for development and poverty alleviation in urban India, recognizing the importance of cities as engines of economic growth. However, being the first such attempt of its kind, the review of its performance has been mixed2 and much more effort and commitment is needed in this regard. Although budgetary allocations for urban development have risen substantially, these do not compare with the allocation for schemes and interventions for rural India. The per capita expenditure on the urban sector at Rs. 1,566.00 is significantly lower than the per capita expenditure in the rural sector, which is Rs. 7,433.00 for the current plan period.

In the past, the focus on the development of rural India was justified because of the large proportion of the population living in rural areas4. There has, in recent years, been a marked shift in the country’s economic structure, from a predominantly agrarian economy to a manufacturing and services sector-oriented economy. Today, urban population growth areas and the accompanying challenges demand concerted policy attention. India is a part of the global trends where an increasing number of people live in urban areas. The number of towns and the absolute urban population in India has increased steadily over the last 60 years (Table 1). More significant for policy formulation is the share of urban population to total population (Graph 1), which has grown from 17.3 per cent in 1951 to 31.16 per cent in 2011. Varying projections place urban population at about 590 million – 600 million in 2030.