Economic Advisory Council to the Prime Minister (EAC-PM) suggested changing definition of rural-urban areas in India. EAC-PM member in a working paper titled ‘What is Urban/Rural India’ suggested that government needs a more dynamic approach to define rural-urban areas.
Current Definition of Rural and Urban settlements:
As of 2017, any settlement that is not considered 'urban' is automatically considered 'rural'.
There are 2 types of urban settlements
✓ Administratively urban settlements are those that are governed by an Urban Local Body (ULB).
✓ Census Urban Settlements are those that have a population greater than 5000, 75% of male population working in non-agriculture, and a density of 400 people per sq. Km.
Problems with current labelling of settlement:
✓ Current classification often inadequate in capturing speed and scale of urbanization in India.
✓ Panchayats in de facto urban areas are ill equipped in terms of human resources.
✓ Slow transition from rural administrative panchayats to ULBs results in incorrect standards of services being applied; unmet requirements of local public goods, etc.
Solutions provided by EAC-PM:
✓Establish “trigger mechanisms” which automate transition from rural to urban settlement after prescribed threshold is reached.
✓ Ministries should utilise census and other settlement wide indicators to determine rural definition that best suits their particular programme’s mandate.