India won’t be viksit if it doesn’t largely reduce number of people staying in villages: Montek Singh Ahluwalia

Ahluwalia made these remarks during an interaction on “Resilient Pathways: Charting India’s Economic Growth Amid Global Challenges” at the state government’s Invest Karnataka 2025 meet alongside economist and author Salman Soz.

Ahluwalia emphasised that making a city liveable involved more than just attracting corporate investment. “There is a whole lot of urban management that has to be done. And there, Bengaluru has not done what it should be doing. Now that it is on the global map, the first thing that should be done is that the Bengaluru city government should be made hugely more efficient,” he said.

Ahluwalia said that city governments in India lack sufficient power. “Constitutionally, any state government can empower lower levels of authority as much as it wants. The constraint is not how to do it; the constraint is whether anyone wants to do it,” the economist said.

Advocating more urban centres, Ahluwalia suggested that tier-II cities should be developed into metros. “The only case it happens is when new states are carved out… If you did that, instantly there would be political willingness to create two or three new cities,” he said.

If India grows at 8 per cent for 20 years, it will be private sector-led and is likely to begin in the South, Ahluwalia said. “And then you will have those regional issues. If the country is to grow at 8 per cent and the South grows at 9 per cent while the North grows at 7 per cent, politics should be able to handle it,” he added.

While acknowledging that the slower population growth in the South compared to the North could be beneficial, he warned that it would lead to increased migration. “Lower-end jobs will be filled with people coming from Bihar, Orissa and so on. That is a huge structural change which will have all kinds of consequences,” he said, calling for discussions on the issues accompanying economic reforms.