The lack of evenness between the vertical and horizontal trade had two effects. First, a highly skewed ratio between cities and villages emerged. For example, Johnson (in the 1950s) found that in India, on an average, there were 468 villages for every town. If the inter-urban hierarchy of settlements was not skewed and the ratio was the same as in the United States, then India would have had 47,000 towns; instead, she had less than 2,000.
Second, the spatial pattern of Indian cities and villages in space evolved in a different way. The Indian system acquired a dendritic form in which the major port cities represent the head of the dendrite and the strategic cities and local marketplaces constituted the tail. During the same period, settlements in the West arranged themselves in the form of the asymmetrical honeycomb (hexagonal) because a hexagon is the most efficient distribution of habitations in space. In this arrangement, strong economic links existed between settlements and investment, both private and public, leading to the best development outcomes.
A well-ordered habitation pattern arises when trade between the vertical and horizontal value chains is balanced among settlements at different levels – global, nation state, district, city and village.
The conventional way to address asymmetry in spatial patterns of settlements is to identify the gaps in the hierarchy of settlements and focus on the growth of high potential intermediate settlements. This strategy was suggested by the National Commission on Urbanisation (NCU) in 1988. The NCU noted that markets in cities were isolated with weak linkages to hinterlands. In order to address the gaps in the urban network, the NCU recommended retrofitting of intermediate towns. Specifically, the NCU identified 329 cities, called Generator of Economic Momentum (GEMs), and 49 Spatial Priority Urban Regions (SPURs) for redevelopment. The development of GEMs and SPURs would lead to an ordered network of market- places in the way given below. Traditionally, retail stores selling cheaper, frequently purchased goods (e.g. groceries) are found in small towns and these are called “low order goods”. On the other hand, departmental stores (or malls) selling expensive, less frequently purchased goods (e.g. watches, jewellery) are located in large cities and these are called “high order goods”. People living in small towns visit large cities in order to purchase high-order goods. In a well-ordered hierarchy, towns selling different orders of goods are arranged in a way so that consumers have to travel the minimum distance to purchase goods and services. Digital technology has opened up avenues for addressing the gaps in urban networks without waiting for the development of intermediate towns.
E-commerce is a digital platform that connects consumers with producers (or intermediaries) without the intermediation of a physical marketplace. E-commerce delivers goods and some services at the consumer’s doorstep so that they do not have to physically go to out- lets. The size of settlements in terms of markets selling different orders of goods loses meaning. The lack of continuum from the villages to the metropolitan cities ceases to matter. Nations do not have to go through the slow and costly process of developing missing settlements. In practical terms, a virtual network of markets is created, which substitutes for missing brick-and-mortar stores in a skewed settlement pattern of marketplaces. This is what has happened in India and has led to an explosive growth of e-commerce. There are potential benefits for domestic supply chains too. Imagine if e-commerce companies start buying farm products directly from farmers and sell to households in India or to any place in the world. Farmers will get a higher price and consumers will be able to buy reliable farm produce at cheaper rates. There will be large-scale employment generation in villages, small towns and large cities. A large-scale digital network will develop, which will enable routing of subsi- dies directly to the farmers.
Most importantly, an adverse colonial legacy will be reshaped to India’s benefit. (Author has a PhD from the USA and a DLitt from Kanchi University. The arti- cle is based on his research and practice and views are personal Imagine if e-commerce companies start buying farm products directly from farmers and sell to households in India or to any place in the world. Farmers will get a higher price and consumers will be able to buy reliable farm produce at cheaper rates.