All about India

1. Recession in 1997
After the recession in 1997, firms in urban India were left to struggle in the competitive market environment. High investment in large-scale technology ventures became the norm (Vikalp Alternatives, 2005). However, this led to the creation of many low skilled jobs, as well as unsustainable human investment. Deregulation of job processes led to a greater informalisation of the job scene as many tasks were sub-contracted. Hence, employment was informalised in urban India, resulting in insecure livelihoods as well as increase in poverty rates (Vikalp Alternatives, 2005).

2. Rural-Urban migration
Most foreign companies favour investment in urban areas rather than rural areas due to presence of better facilities and higher-educated manpower in urban areas, and with city authorities investing in infrastructure and services, urban renewal in India has gained momentum. This should ideally lead to more efficient enterprises, infrastructure and services, but in India, this has accelerated the rural-urban migration as the creation of industries often leads to the creation of more low-skilled jobs which attracts rural dwellers who generally receive lower standards of education. As more people migrate from rural areas to urban areas in search for better jobs and better living conditions, job opportunities decrease, leading to greater competition for jobs in urban areas (Vikalp Alternatives, 2005). Hence, unemployment rates in urban India increase. With unemployment brings a lack of income, thus increasing the vulnerability of people falling below the poverty line, therefore increasing the incidence of poverty in urban areas.