- Manika Premsingh
While the major metros of the country dominate the economy of the country, over the next few decades, we will see a mushrooming of many more economic hubs in the country. Ahmedabad, Chandigarh, Bhopal and even the eastern cities of Bhubaneshwar and Guwahati are worth watching out for, going by the trends in foreign investments there.
Economies develop around cities - some places become hubs, while others take time to gather pace along the road to development. So in India, it is no surprise that Mumbai is *the* city of today - the melting pot of Indian cultures, business and the largest city economy in India - being a major port city that developed around trade. Similarly, Chennai is another major Indian metro with a coast. During the 19th century, Kolkata port, too was an important one for the British. Delhi, is the only major metro in India whose economy has not thrived on account of a water route.
But the trade of yesterday, is hardly the trade of today. With India being an increasingly services oriented economy and given the very happy marriage between India's technological advantage and its strength in services, with basic infrastructure in place, any city is good as another. So Bangalore, for instance, has emerged as a fast growing metro in the recent years. Hyderabad is following suit. India's still small industrial sector can fulfill demand in India, and states/cities that offer industrial advantage will find themselves thriving too.
So which are the cities of tomorrow for India?
The potential of a city is to some extent explained by the kind of investments that are taking place there. The logic being, that investments chase gains, and therefore an investor would put in funds into geographies that either lower costs or offers returns (depending on the sector invested in). Either way, the city wins. Latest official FDI figures show that while the major metros - Mumbai, Delhi, Chennai and Bangalore are top of the game, as is to be expected, cities like Ahmedabad, Chandigarh and Bhopal are showing great potential too. Investments in Ahmedabad outstrip those in Hyderabad and even Kolkata.
And while cities like Bhopal, Kochi, Panaji, still have cumulative FDI inflows less than US $ 1 billion so far, they are playing catch up. In fact, eastern cities like Bhubaneshwar and Guwahati are also among the top-15 FDI recipients.
If these trends continue, in the next couple of decades, the hubs of economic activity might be very different from what they are today. Even if most of the major metros continue to thrive on account of legacy factors, some like Kolkata might become part of the old world if activity does not pick up. On the other hand, there is the definite emergence of new economic centres across the length and breadth of the country if they continue on the current path.