Kerala, with its distinct rural-urban continuum, is preparing to launch a forward-looking urban policy that may be the first of its kind in India. The policy aims to address the state’s anticipated urban growth and will lay the groundwork for sustainable development over the next 25 years. Kerala’s unique socio-economic landscape, where rural and urban boundaries often blur, has prompted the need for a well-regulated and comprehensive urban planning approach.
Kerala’s Urban Policy Commission: A First in India
In a significant step toward reforming urban development, Kerala became the first Indian state to establish an Urban Policy Commission (KUPC) last year. This initiative was supported by the Centre’s Atal Mission for Rejuvenation and Urban Transformation (AMRUT). On December 18, 2024, the KUPC submitted its interim report to Chief Minister Pinarayi Vijayan, focusing on boosting the state’s economy, creating quality jobs, and reforming urban planning and governance. The commission’s final recommendations are expected by March 2025.
M B Rajesh, Kerala’s Minister of Local Self-Government, emphasized the importance of regulating the rural-urban continuum as an opportunity for growth, highlighting the need for a new urban policy in light of the state’s socio-economic realities.
Kerala’s Unique Urban-Rural Continuum
Kerala is characterized by a unique urban-rural continuum, where rural areas are interspersed with urban elements, leading to a form of urbanization that is less concentrated and more spread out. M. Satish Kumar, Chairperson of the KUPC, noted that Kerala’s rural and urban areas have traditionally blended well, resulting in dispersed settlements rather than the formation of distinct towns or cities.
This continuity between rural and urban areas presents both challenges and opportunities. The state’s urbanization rate is one of the highest in India, with projections suggesting that over 90% of the population will live in urban areas by 2035, compared to 47.7% recorded in the 2011 Census.
Challenges of Unplanned Urban Growth
While Kerala’s rural areas are well-provisioned, the state faces challenges arising from unplanned urban expansion. As settlements encroach upon agricultural land and ecologically sensitive areas such as wetlands and highlands, the state experiences increased vulnerability to climate change. Unseasonal rainfall, flooding, and landslides are among the environmental hazards exacerbated by rapid urban growth.
The unregulated expansion also leads to growing difficulties in managing solid waste, sanitation, and essential civic services. Experts, including Kumar, emphasize the importance of integrating urbanization with ecological sustainability and ensuring that rural areas are not negatively impacted by urban growth.
Institutional Framework and Governance
Kerala is well-positioned to maintain a balance between rural and urban areas due to its strong institutional framework. The state has a single ministry overseeing both rural and urban areas, ensuring better coordination. Moreover, local bodies such as municipalities and panchayats receive a significant portion of the state’s planned resources—28%—enabling effective governance at the grassroots level.
The state’s focus on providing quality healthcare, education, and social services uniformly across rural and urban areas has contributed to high human development indicators. Kerala ranks consistently high on the NITI Aayog’s Sustainable Development Goals Index, reflecting its commitment to social equity.
Despite the state’s achievements in human development, Kerala faces significant economic challenges, particularly with regard to unemployment. The state has the highest youth unemployment rate in India, and brain drain remains a pressing issue. Additionally, Kerala’s finances are strained, with the government attributing this to insufficient financial transfers from the central government.
Minister Rajesh highlighted the need for increased investments in higher education and addressing emerging “second-generation” issues such as lifestyle diseases. The state is also grappling with the challenge of balancing its population control efforts with the demand for greater financial devolution.
Emigration and Remittances: Economic Implications
Emigration for work has been a longstanding trend in Kerala, with millions of Keralites seeking employment abroad. According to a 2020 study, the number of emigrants grew significantly from 100,000 in 1981 to over 2.4 million by 2012, although this number decreased slightly in 2019. While the influx of remittances has significantly contributed to Kerala’s economy, the increase in consumption has not been matched by higher tax collection, posing challenges for the state’s financial health.
Experts suggest that a shift in how remittance capital is used—focusing more on public infrastructure rather than personal consumption—could help address some of Kerala’s development challenges. The KUPC has also recommended exploring municipal bonds to raise private funds for urban infrastructure development.
The KUPC’s recommendations include improving the financial health of local urban bodies by increasing their own-source revenue and enhancing property tax collection. The commission advocates for innovative solutions, such as GIS-based land inventory and property tracking, the introduction of vacant land and building taxes, and land pooling for real estate development.
To ensure efficient governance, the KUPC has proposed the appointment of city managers and information technology officers in urban centres. Additionally, the commission calls for the establishment of local economic development authorities and the creation of special zones based on resource potential to drive economic growth in cities.
Preparing for a Climate-Resilient Future
Climate change poses a significant challenge to Kerala’s urbanization process. To mitigate the impacts of rising sea levels and other climate-related risks, the KUPC has recommended the integration of climate data into urban planning, the implementation of flood barriers, and a multi-hazard early warning system. Furthermore, the commission has emphasized the importance of decarbonization efforts, including mandatory carbon audits for businesses and promoting a circular economy.
Kerala’s commitment to addressing climate change is evident in its push for risk-informed master plans and its efforts to safeguard the Western Ghats, which are crucial to the state’s environmental sustainability.
Kerala’s new urban policy is poised to be a game-changer in addressing the complex challenges of urbanization, climate change, and economic growth. By focusing on sustainable urban development, governance reforms, and fostering a knowledge economy, the state aims to ensure a prosperous and resilient future for its residents. With the final recommendations of the KUPC expected by March 2025, Kerala’s urban policy will likely serve as a model for other Indian states facing similar challenges in managing rapid urbanization.
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