Kerala is known to have a distinct rural-urban continuum, where the lines between villages and towns have long blurred, giving the state the appearance of one continuous city. To address this unique sprawling development and provide a roadmap to manage urban growth in the next 25 years, the state is now all set to launch a policy that may be the first of its kind in India.
Last year, Kerala became the first Indian state to set up an Urban Policy Commission through a state cabinet decision with financial support from the Centre’s Atal Mission for Rejuvenation and Urban Transformation (AMRUT). On December 18, the Kerala Urban Policy Commission (KUPC) submitted its interim report to chief minister Pinarayi Vijayan, focussed on boosting the economy, creating quality jobs, and reforming urban planning and governance. The Commission’s final recommendations are expected by March 2025.
“In the past, the only comprehensive policy we had was the National Urbanisation Policy of 1988, developed under architect Charles Correa. However, there hasn’t been a similar policy for the states,” said M. Satish Kumar, professor at Queen’s University, Belfast, and KUPC chairperson.
According to the 2011 census, 47.7% of Kerala’s population lived in urban areas, making it one of India’s most urbanised states after Goa, Tamil Nadu and Maharashtra. By 2035, more than 90% of the population is projected to be urban. Intended to provide a roadmap for the next 25 years, Kerala’s urban policy is also meant to serve as a lighthouse for other Indian states.
“Traditionally, desa (rural) and kota (urban) areas have blended well in Kerala, resulting in an urban-rural continuum characterised by dispersed settlements rather than concentrated in a town or a city,” said Kumar.
{{/usCountry}}“Traditionally, desa (rural) and kota (urban) areas have blended well in Kerala, resulting in an urban-rural continuum characterised by dispersed settlements rather than concentrated in a town or a city,” said Kumar.
{{/usCountry}}The 2011 Census recorded an 83.82% decadal increase in Kerala’s urban population from the previous decade, largely due to the reclassification of rural areas as urban. It identified 461 Census Towns (CTs), which are administratively rural settlements but satisfy the criteria of urban areas with a population exceeding 5,000, a density of 400 people per square kilometre, and at least 75% of the male workforce employed in non-primary sector jobs.
Four years later, the United Democratic Front (UDF) government converted 42 of these into Statutory Towns (STs). Classifying CTs as statutory towns (STs) causes residents to lose access to rural funding tied to central schemes such as MNREGA, besides national rural health and livelihood missions. They also face higher taxes and stricter building regulations, making the issue a political hot potato.
The argument that CTs would benefit from urban status through improved public infrastructure has not been motivating enough, mainly because Kerala’s rural areas are generally well-provisioned.
One endless city
“Visually, Kerala is like one endless city,” noted M B Rajesh, the state’s minister of the local self-government department. “It’s Kerala’s socio-economic reality. We need to regulate it and leverage this continuum as an opportunity,” he said.
Regulations are necessary, said Kumar, because unplanned urban growth encroaches on productive agricultural land and ecologically sensitive wetlands and highlands. Besides, the unplanned expansion of settlements has to deal with the increased frequency of storms and cyclones, leading to unseasonal rainfall and associated flooding, landslides, and stormwater surges.
At the same time, urbanisation also increases the challenges related to sanitation, solid waste management, and the upkeep of essential civic services. It is crucial to ensure that urbanisation does not come at the expense of the rural and mindful of the eco-sensitive areas, he added.
Institutionally, Kerala is better positioned than many other Indian states to maintain the rural-urban balance, said the state’s former chief secretary, S M Vijayanand.
“A single ministry oversees rural and urban areas. Additionally, the devolution of functions and finances (28% of the state’s planned resources) to local bodies—municipalities and panchayats—is significantly greater.”
By focusing on providing quality healthcare and education uniformly across villages and towns, Kerala has performed exceptionally well on the human development index. In recent years, it has topped NITI Aayog’s Sustainable Development Goals Index. Life expectancy rates are notably high, and fertility rates have decreased, slowing down the population growth rate, which is now among the lowest in India. At the last census, Kerala’s elderly population was 12.6%, compared to the national average of 8.6%.
Despite high literacy, the state has the highest youth unemployment rate in the country, and brain drain is a serious concern. Currently, the state’s finances are in disarray. While the opposition accuses the government of mismanagement, the Kerala government attributes the crisis to insufficient financial transfers from the central government.
“We have done well to control the population growth and meet the national goal, but the Union government is using this to discriminate against us because devolution of funds is based on the population size of the states,” said Rajesh, flagging “second-generation” issues—lifestyle diseases and the need for quality higher and technical education—that require urgent redressal through adequate investments.
Emigration for employment opportunities and foreign remittances—money sent by workers abroad to their families in Kerala—are long-standing trends in the state. In a paper published in the Indian Society of Labour Economics in 2020, development economists K P Kannan and K S Hari noted an impressive increase in emigrants from 100,000 in 1981 to 2.4 million by 2012, followed by a decline to 2.12 million by 2019. The growth in per capita remittances resulted in the total remittance surpassing the state’s total revenue by 16%.
But the authors also highlighted a downside: the increase in consumption has not been matched by a corresponding maintenance of the tax-to-state income ratio, primarily due to decreasing tax collection efficiency.
Much of the diasporic capital in Kerala is directed toward personal ostentatious consumption, said Kumar. But it could be directed to public infrastructure with adequate incentives, transparency, clear returns on investment and fair regulatory frameworks that work for all, he added.
The KUPC recommends tapping into the municipal bonds opportunities to raise private funds. At the same time, it suggests the immediate updating of the credit ratings for all six key municipal corporations in Kerala.
However, this can only occur once the local bodies are in the black. To improve the financial health of urban local bodies, KUPC’s recommendations include increasing their own-source revenue from 25-35% to 70%, boosting property tax collection from 50% to 90%, implementing GIS-based land inventory and property tracking, introducing vacant land and building taxes, and exploring land pooling for real estate development.
With the decennial population census in India, which will provide an accurate count of people living in rural and urban areas, has been delayed by three years now, the KUPC relied on standard urban population projections and the urban spatial spread data provided by the Bhuvan portal, a geospatial service run by the Indian Space Research Organisation (ISRO). Having YVN Krishna Murthy, a distinguished ISRO scientist, on the commission has been a “tremendous help.”
Kerala is densely populated due to its unique geography, where land comes at a premium. “Future projections show that urban clusters will move northward because those areas have space and scope for expansion,” said Kumar. KUPC has also recommended setting up metropolitan committees in three cities—Thiruvananthapuram, Ernakulam, and Kozhikode—by 2025 because they have emerged as key representative urban centres in Kerala.
Instituting reforms requires professionalism, and the commission has prescribed appointing city managers and information technology officers. Urban centres are often regarded as engines of growth, yet Indian cities usually lack a voice in economic planning. To drive change, the commission proposed creating a local economic development authority under the local self-government department minister, establishing business development councils in all districts and cities, and forming local economic special zones based on resource potential.
Its recommendations also include a 25% reservation for elected youth members in municipal bodies to make them inclusive.
While cities in Kerala may have missed out on the post-liberalisation IT boom that Bengaluru and Hyderabad cashed in on, there is now a significant push for a “knowledge economy” in urban policy. Rajesh is also banking on the state’s start-up ecosystems and the tourism sector which still holds considerable economic and employment potential.
“Due to ecological fragility and rising sea levels, there is little scope for setting up large industries. Land is scarce, and our population density is high. However, Kerala boasts a better-educated workforce, so creating opportunities for employment in the STEM (Science, Technology, Engineering and Mathematics) sector is our priority,” he added.
To fight the challenges posed by climate change, KUPC recommends integrating critical climate-related data across diverse scales, implementing a multi-hazard early warning system, installing temporary flood barriers to protect high-risk areas, and fostering collaboration among states to safeguard the Western Ghats. For decarbonisation, it has sought mandatory carbon audits for corporations and MSMEs to promote a circular economy. Preparation and implementation of risk-informed master plans for cities is also recommended with the hope that these measures will have a demonstrative effect on rural bodies as well, said Kumar.