Economic growth faster in smaller cities, say experts

Hyderabad: Bengaluru and Hyderabad are currently booming with rapid growth in technology and start-up firms, Nagpur, Tiruppur, Rajkot, Tiruchirappalli, Chennai and Vijayawada, will witness the fastest economic growth in the world, says the study.

Dr Devendra Pant, Chief Economist at India Ratings, pointed out that major metros like Delhi and Mumbai did not find place in the list while  smaller cities like Nagpur, Vijayawada, Rajkot have. It is because cities smaller in size and population are likely to consume or purchase more domestic products than larger ones thus are estimated to grow faster on the economic scale.

“It is known, that India among bigger size countries has the fastest growing economy in the world, there may be countries whose GDP rate is higher when compared to India, that is between 2.5- 3 trillion dollars, but are smaller in size and population. As India is growing, the chances are high that every state, city is contributing to its economy,” he said.

He further explained one needs to understand that the US and European countries are struggling to grow consistently at GDP rate of 4-5 %, it is because their state and cities are unlikely to grow at a faster pace due to poor demand in domestic product. So, who will grow, it is the countries with states, cities with smaller size and high demand for products (like Nagpur, Rajkot, Vijayawada). The growth happens when citizens invest, purchase products.

In the latest economic survey carried out by the World Economic Forum, it was mentioned that India's economy is set to grow faster than China's, at a rate of 7.4 per cent in 2019 compared to China’s 6.2 per cent.

“Indian citizens continue to have a very strong domestic product demand; people want two televisions, two cars and invest in many other products thus increasing the GDP growth. In Hyderabad, following the high demand for products, several international companies have established their outlets. But despite the speed of growth of Indian cities, they remain relatively small in terms of economic output, added Sunil Shegal, a market watcher.