One of the features of the provisional results of Census 2011 that has already captured a lot of media attention is the apparent increase in urbanisation. At one level, this may not seem to be all that significant, with urban residents going from 27.81 per cent of total population in 2001 to 31.16 per cent in 2011, or an increase of only 3.35 percentage points over a decade. This is not really a very major shift, and certainly a rate of urbanisation of less than one-third of the population is significantly less than in many other developing countries, even those at similar levels of per capita income.

Nevertheless, it has created some excitement, because for the first time since Independence, the decadal increase in the size of the urban population (by 90.99 million people over 2001-11) was greater than that of the rural population (90.47 million). It is not only in the smaller states that urbanisation appears to be proceeding apace. In some larger states like Tamil Nadu and Kerala, the proportion of urban to total population is already approaching nearly half, while Maharashtra and Gujarat are not too far behind.

This finding has quickly generated reactions in the policy making community. The Planning Commission has already noted that ''addressing the problems posed by the urban transformation that is likely to occur'' is among the four key challenges posed for the next Five Year Plan. (The others are described as those of managing energy and water and of protecting the environment.) Other commentators have talked about the need to put much greater emphasis on urban infrastructure creation and management, and on the need to ensure that the growing cities are ''livable''.

The implicit assumption in much of the discussion seems to be that the expansion of urban population is occurring largely in the bigger towns and cities, as well as the apparently unstoppable metros. But is this supported by the evidence?

Urban population increase reflects the outcome of three separate forces: the natural increase in population within the urban areas; the migration of rural dwellers to urban areas; and the reclassification of settlements from rural to urban. All three have been at work over the past decade. While we still do not have access to the detailed Census data that would allow for the disaggregation, we do know that the last factor is likely to have played a major role, simply because there has been a significant, even remarkable increase in the number of urban conurbations in the latest Census. The number of urban settlements has increased from 5161 in 2001 to 7935 in 2011, an increase of 54% that dwarfs the 32% growth in urban population.

The 2011 Census classifies an area as urban if it fulfils any one of two conditions. Firstly, any area that comes under a corporation, municipality or town panchayat is automatically classified as urban, and is defined as a ''statutory town''. Secondly, a location is considered to be urban if it contains a population of 5,000 or above, has a density of at least 400 persons per square km and 75 per cent of the male work force employed in non-agricultural occupations. It is then defined as a ''Census town''.

As the table shows, one of the significant processes that has been at work in India over the past decade is the very significant increase in ''Census towns'' – that is, those places that are not recognised in a statutory sense as urban areas but fulfil the criteria laid down by the Census. These account for more than 90 per cent of the increase in the total number of urban settlements. In a few states (such as Karnataka, Haryana and Jharkhand) the number of statutory towns has actually fallen, while the number of Census town has increased very sharply. Overall all, the number of Census towns has increased by more than 180 per cent, while there has been more than threefold increase in their numbers in Bihar, Kerala, Punjab and Uttar Pradesh.

It is also likely that a very significant part of the ''urbanisation'' that is being talked about is actually a reflection of this reclassification of settlements, rather than of rural-urban migration per se. This will only be clear when further Census 2011 results are provided, but it is obvious that such a large increase in the number of Census towns must have had a counterpart in the number of people defined as living in urban areas.

This brings into play a set of entirely new issues around the phenomenon of urbanisation, and it is surprising that these have not yet come up in any significant way in the policy discussion. How exactly do we define ''urban''? When villages grow in size and start including a greater proportion of work force engaged in non-agricultural activities, they will increasingly be considered as ''urban'' in this sense, but they will be outside of the administrative and policy framework that is designed to deal with urban areas. And this leads to a huge range of new questions and problems.

In the absence of the institutional framework of a municipality, how are the standard problems relating to urban infrastructure, utilities like electricity and water, sanitation and the provision of other basic services to be dealt with? To what extent has the planning process (and policy making generally) incorporated the needs and requirements of these areas? Indeed, are there any plans at all for such settlements, including the standard plans relating to land use, provision of schools, health care centres, community services and the like? What about spatial provisions like sufficient open spaces, public parks and playgrounds, and avoiding congestion?

It could well be that currently these ''Census towns'' are simply off the radar of most policy makers and implementers, because they do not fall into the statutory definition of urban and are still included in ''rural'' areas for administrative purposes. Yet there are 3,894 such towns according to Census 2011, and they are bound to account for a significant (and possibly growing) part of the urban population as described in the Census. Ignoring the specific needs of these areas and their residents is likely to create many problems in the future.

So this clearly amounts to another major challenge posed by ''urbanisation'', but one that has still barely been recognised in official circles.

It is worth adding to this another feature that has emerged from the other important official dataset that has just been released – the employment and unemployment data of the National Sample Survey round of 2009-10. That reveals that rates of employment generation have slowed down dramatically in both rural and urban areas (though it is not clear whether they have included only statutory urban areas in their definition).

So we have a potentially deadly combination: growing population in small urban areas, with poor or possibly non-existent facilities, no urban planning to speak of to ensure liveable conditions, and inadequate employment generation especially for the increasing numbers of young people that are part of the demographic bulge. The potential for social tensions and conflict as well as instability of various sorts, hardly needs to be reiterated given our unfortunate history with such issues.

In this context, it is surprising that the Planning Commission did not list adequate good quality employment generation as a major challenge for the coming Plan period. Ignoring this very formidable challenge is perilous, because the adverse implications are not long term or even medium term: they are likely to come and bite us only too soon.

* The article was originally published in the Frontline Volume 28 - Issue 17, August 13-26, 2011.