What’s Happening in Small Towns?

By Anjum Altaf

In an earlier post (What is the Future of the City in South Asia?) we had mentioned that the dynamic in small towns was quite different from that in the major metropolitan centers. In this post we speculate about some of the possible differences.

An unusual approach is to work backward from the observation that while all attention is focused on the tribal areas in Pakistan, the breeding grounds of religious extremism are actually the small towns in the Punjab. Why might this be the case?

One hypothesis is that small towns in Pakistan that have declined economically have become socially more conservative with a possible link to the increase in religious extremism.

There is little doubt that the economic function of small towns has changed significantly over time. Earlier, most of them were busy market (mandi) towns serving as points of interaction between rural hinterlands and the larger commercial centers.

Dramatic improvements in transport and communications have eroded the importance of this function. Agents in rural areas can now be in direct touch with their counterparts in the big cities, and transportation is fast, cheap, and efficient enough to eliminate the need for intermediate transaction points. The net result is that the economic reach of the big city has extended much further and has absorbed many of the old economic functions of small towns.

Cell phone and Internet-based technologies are further enlarging the reach of the big city. A pointer to the future is the emergence in India of a service called ‘e-choupal’ which creates a direct marketing chain between the village and the big city by eliminating the middleman. Its advantage is claimed to be the reduction of wasteful intermediation and multiple handling, thereby lowering transaction costs. 


Similar changes in the economic functions of small towns took place in Europe over the last century. However, as a result of economic growth, these small towns developed new economic functions to replace those they had lost. In particular, as the costs of land and labor rose in the big cities, many mature industries moved out of the big cities and relocated in the less expensive small towns.

This has happened to some extent in Pakistan around Faisalabad, Gujranwala and Sialkot. But Pakistan over the past quarter-century has been characterized by industrial stagnation, and such relocation has not been widespread enough. In addition, fraudulent practices in the land market have deterred entrepreneurs from risking their investments in unfamiliar places where they might lack local contacts in the right places. On balance, small towns in Pakistan seem to have lost more economic functions than they have gained.

Advances in communication and transport that have increased the reach of the big city have also had a negative impact on the social fabric of small towns. Small town elites formerly comprised property owners who used their political power to obtain public funds for improvements in local living conditions, e.g., roads, schools, clinics, etc. But technological advances have now made it possible for these elites to continue doing business in small towns while moving to live in bigger cities where better services and opportunities are available for themselves and their children. Their interest in the social improvement of small towns has thereby diminished considerably.

In Pakistan, it seems that the vacuum created by the social withdrawal of the economically productive, property-owning, elite has been filled by the emergence of a professional religious class. Over the last quarter century or so, these new ‘elites’ have been able to channel funding for religious purposes (zakaat) into the promotion of religious education and institutions like the madrassahs. As a result, the central ideas that motivate social behavior and political action in small towns are now largely religious, not economic.

The unemployment stemming from the economic decline of small towns has been exacerbated by the increased supply of unemployable youth graduating from the madrassahs. This supply is the consequence of a below-the-radar human-capital development program that has, by now, produced graduates numbering in the millions. This bulge of unemployable youth has, in turn, increased pressures for injecting more religious content into the institutions of society to provide some kind of employment opportunity for graduates with religious qualifications. Social improvement is now sought increasingly through governance based on religion rather than through old-fashioned economic development.

While we have described a possible dynamic in economically stagnant small towns in Pakistan (which are nevertheless increasing in population size), Sunil Khilnani presents in The Idea of India a picture of prosperous small towns in India that are also marked by a culture of violence.

An aggressive small-town India was surging across parts of the country, impelled by rural economic surpluses…. built-up sprawls stretching along the national highways deep into the countryside, blurring distinctions between the village and the city…. these are the homelands of India’s ‘new middle classes’.

Sunil Khilnani describes how these emerging new cities “have become the heartlands of a vigorous caste politics” and also the “recruiting grounds for the BJP’s Hindu nationalists.

The BJP’s brand of televisual religion is attuned to the desires of these cities’ inhabitants, and the mobilization of their votes has become an essential element in the party’s strategy. L.K. Advani’s rathyatra of 1990, for example, a chariot procession that covered more than 10,000 kilometers, took in dozens of such cities… sparking off violence and riots wherever it went.

So, whether small towns are declining in Pakistan or prospering in India, their social dynamic is giving rise to a dangerous intolerance and a culture of violence. A part of the answer to the puzzle might be found in Professor Dipankar Gupta’s thesis of the ‘vanishing village’ in India. As villages fail to provide adequate employment and livelihoods, their residents move to small towns and the process of social dislocation combined with the imperatives of South Asian electoral politics gives rise to various poorly understood pathologies.

It is clear that a lot more study needs to go into understanding what is happening in small towns in South Asia today, what it means for the future, and whether a vision can be articulated for a positive contribution of small towns to the economic and social development of a prosperous and peaceful South Asia.

A part of this analysis appeared in the Daily Times, Lahore, on May 30, 2004. The author was a Visiting Fellow at the Sustainable Development Policy Institute in Islamabad at that time. Readers should link to Himal magazine’s October-November 2008 issue for a discussion of cities in South Asia today.

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14 Responses to “What’s Happening in Small Towns?”

  1. Vikram Says:

    This article presents an interesting take on small town India,
    http://www.dnaindia.com/opinion/column_why-small-town-india-is-checking-out_1267896

    It seems that a lot of small town India is indeed checking out. I think this is an interesting development. Although it seems that the recent incidents in Australia and the fallout (tighter visa rules and crackdown on dubious universities) might put an end to that particular route.

    • SouthAsian Says:

      Vikram, Thanks. That was a useful input. Would you agree that this is the most worrisome part of the situation in India? The lack of investment in rural capital (both physical and human) and not creating enough jobs for the cohorts entering the labor force will be a huge drag in the future. Dipankar Gupta wrote a book (The Vanishing Village) that showed young people deserting the rural areas. Now we have this evidence that small towns are not being able to hold their populations. When you see this as one side of the picture the gains of the Naxalites can be seen as the other. The Planning Commission has acknowledged the problem with the report on its website but there seem to be no measures to address the situation. I wonder what the policy makers are thinking.

      • Vikram Says:

        I agree. NREGA is trying to address the lack of investment, with what I would call mixed results. I think the gains of Naxalism have a lot more to do with deprivation and state repression.

        It would be interesting to study the demography of these migrants. That would give us a clue as to which states have done a better job of retaining young people and suggest possible solutions for the states in trouble. I am saying this because the overwhelming number of these migrants (from anecdotal evidence) seem to be from the Haryana, West UP and North Rajasthan belt.

        • SouthAsian Says:

          Vikram, There could be a conundrum here especially if education is a state subject but industrial policy is dependent upon the federal government. To migrate, especially to places like Australia, individuals would need minimal skills including some English. So states that would do relatively better at educating people but are unable to provide them appropriate jobs would have the highest likelihood of this kind of outmigration.

  2. NDR. Design Naturally. Says:

    Let us add to this discussion by bringing in a report, as it were, from the field. Both the questions of migration, and the direction of migration, are fascinating ones. Without questioning the validity of any work that has gone before this, let us also add another thesis : that of ‘reverse mobility’, where people (and especially in India) are increasingly having a tendency to move from the metropolis, to the smaller (not quite metropolis) town that is attractive because of its easier living and higher quality of life. We think a case can easily be made for the movement of skilled migrants from a place like, lets say Delhi, to its hinterland knowledge hubs, for example Chandigarh. The same might be true for the twins of Chennai-Pondicherry, Mumbai-Pune, and so on.

    The second question is that of aggressive ‘recruiting’ from middle class towns. We think that there are different components of the middle class in South Asia – those more susceptible to outright ‘recruiting’ by political/religious parties, and those that are ‘soft’ or ‘passive’ recruits, made so by their level of education and position in society.

    There is a very interesting dynamic happening in the past five years of so in South Asia, and to our mind it questions the norm of migration from smaller town to bigger city…

    Now one for the SouthAsianIdea! We have an online portal, and contributions towards our portal in terms of articles/short pieces/writeups by members of the SouthAsianIdea community are very welcome and would very much be appreciated. Please drop us an email should this interest you, which we hope it will. Best wishes and keep up the good work.

    • SouthAsian Says:

      NDR: If mature industries (and with them employment) are indeed moving out of the big cities to the secondary centers, it is a positive development because it is good for economic efficiency. Usually the big hurdle that has slowed this relocation in South Asia has been poorly functioning land markets. People belonging to one place (where they have contacts) are generally reluctant to purchase land elsewhere because of the uncertainties and disputes associated with ownership claims. In China, this problem has been overcome because the state owns all land and cities develop industrial estates to which they provide secure rights along with infrastructure to investors. Is their any reliable data available for the phenomenon you have noted?

      Could you elaborate a little more on the social and economic characteristics of hard versus soft recruits to religious parties in the secondary centers.

  3. SouthAsian Says:

    This story from small town India is a real mixed bag. I wonder what readers make of it:

    The Caste Buster

    • Vikram Says:

      I dont mean to blow my own trumpet, but I feel that the article corrobrates what I said in my three layers of emerging India post and the discussion on English education.

      The importance of television in India Bharat, the growth of the economy from a small base, material ambitions derived from metro India and the hold of social values from Bharat. I think the article provides evidence for all of those.

      I dont see why this story is a mixed bag. It would indicate that atleast some of rural/semi-urban Maharashtra has fared alright in the liberalization era. The only negative thing was the caste based notions of marriage in the older generation, but the article indicated that even those could be overcome. Of course, the infrastructural issues facing small town India were also highlighted.

      What is really needed is similar work for other Indian states, particularly UP.

      • SouthAsian Says:

        Vikram: if you compare this story with the one about Shahabpur that I had linked earlier, you will appreciate why I called it a mixed bag. In the latter, one gets a complete picture, a sense of how the various elements fit together, and of the overall evolution of the locality with its winners and losers. The former has no such sense of balance. The author went to Umred to cover a riot, met an exceptional individual and wrote up his story. One gets no sense of how representative this individual is – how many failures are there for every one success like this? Note that there were individual success stories even in the days when there was no economic dynamism to speak of. So is this just a stroke of luck?

        It is also a mixed bag because the author doesn’t really have a frame in which to evaluate what is happening. Even the title (Caste Busters) is misleading because the story is only tangentially about caste (compare the treatment of caste in the Shahabpur story). And note the ambiguity of the author when he tries to put some things together:

        And I had a sense, from this and earlier visits to Indian finishing schools, of a generation being trained rather than educated. They knew nothing about industry, art, history, literature, science. There were now hundreds of thousands, perhaps millions, of Indians who were making this bargain and adopting this focus. And they were liberating India. But I wondered what kind of country they would make when there were enough of them to change its essential character.

        There is certainly change in the air but what it all means and where it is headed is by no means clear. That is the mixed bag part of the story.

  4. Rita Says:

    I agree. Did not like the piece – the story appeared to be written to fit western perceptions of India rather than provide a deep understanding of the changes.

  5. Arun Pillai Says:

    i agree that the article is a mixed bag. The book from which it is drawn, which I happened to read, is an even more confused bag. It paints a gushing portrait of India’s current dynamism with a few cautionary notes about the actual content of the dynamism, and then ignores these cautions and appears to say that India is the only place to be at the moment. The only worthwhile thing the book seems to say is that the business world is today dominated by traditional Indians as opposed to anglicized Indians who were prominent in the decades immediately after Independence. But even this observation is an oversimplification: the business world at one level would obviously come to be dominated by traditionalists because they form the overwhelming majority of the population; on the other hand, many young urban Indians are quite westernized. So the overall picture is quite complex rather than a simple assertion of traditional ascendancy.

    To my mind, the really sad thing is that wild consumerism and commercialism are growing in India without any educational base so the kinds of people who are emerging are rather crass. This might be a rather elitist statement because who am I to say what people should do with their hard-earned money?

    Here is a view from a resident of Bombay: “about bombay –– as a city it is recklessly going downhill. more high-rises, more malls, more grabbing, more destruction of land, environment and human dignity, more people, more consumerism, more traffic, more road rage, serious pollution, no civility, no compassion; a concrete desert with cranes like dinosaurs hanging over the city skyline waiting to swallow us.

    sounds bleak i know, but there is warmth from friends: the only reason one is still here!”

    • SouthAsian Says:

      Arun: There is an interesting nuance here – that it is possible to be westernized without being anglicized. And this fits in with the other discussion on the blog – that the British interlude was epiphenomenal; the thin layer of anglicization is fading out. You may recall the type of individuals who used to stroll down the Mall in the hill stations fifty years ago and compare them with today’s crowd – one can say the ‘real’ India is reclaiming its spaces. I recall a patrician gentleman who owned an estate in one of the hill resorts but had stopped going there for the summers because, in his words, the “riffraff” had taken over.

      The post-British education was always our choice – ‘real’ India need not be some unchanging entity. We haven’t done a good enough job. Martha Nussbaum has something to say about India too in the link that Vinod has just added.

  6. Jakob Says:

    just studying for an ‘environmental sanitation/water supply’ course exam the issue of ‘small towns’ has popped up in the context that they are the most neglected when it comes to improvements in water supply and sanitation. there are projects on urban areas and those on rural. everything in the middle is unattractive and left out. just reminded me of your ‘small town’ focus and that such a focus is ever more important!

    • Anjum Altaf Says:

      Jakob: It is a coincidence but our small towns project is set to launch on September 1 at the Lahore University of Management Sciences (LUMS). Given that so little is known about small towns/cities by those residing in the metropoles, we are not starting with any preconceived notions of what should or ought to be done. Rather, we will be in a ‘listen and learn’ mode for the first phase. Every week we will have a couple of representatives from a small city near Lahore visit and engage in a conversation structured around various aspects of city life and its potential role in the regional economy. Once we have gone through a dozen of these, we will reflect on the common themes that emerge. We will then get all the representatives back for a joint meeting. Our hope is that there will be agreement on forming an Association of Small Cities to which LUMS will become a policy advisor. We wish to test if an informed collective voice would have more leverage in affecting policy in a positive way at the regional and national levels. Any suggestions would be much appreciated.

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