What is Tier-I, Tier-II, Tier-III and Tier-IV cities classification?

National Affairs

What is Tier-I, Tier-II, Tier-III and Tier-IV cities classification?

15 Jul 2023 Zinkpot 143

Cities in India are classified into Tier-I, Tier-II, Tier-III and Tier-IV by the government, on the basis of various factors.
Tier-I cities are those with a population of 1 lakh and more as per 2001 census. These are cities with well-developed real estate markets and civic and social amenities, along with established businesses. They have the costliest property markets in the country.
As per the government’s classification, there are eight Tier-I cities in India Bengaluru, Delhi, Hyderabad, Chennai, Ahmedabad, Kolkata, Mumbai and Pune. These eight cities are considered as ‘India’s Metro’. Tier-I cities have three-digit STD code.
As per RBI’s classification, Tier-II cities are those with a population of 50,000 to 99,999 people.
There are 97 Tier-II cities in India.Tier-II cities are those that have a fast growing or developing real estate market They are cities where infrastructure and investments are steadily increasing without hitting peak levels yet.
In these cities, real estate prices usually rise with sustained development. They are comparatively cheaper than Tier-I cities. Tier-II cities are fastest growing cities and has 4-digit STD code.
Tier-III cities are cities with the population between 20,000 to 49,999 people. It has non-existent or marginally developed realty markets and businesses, along with other infrastructure. They require more investments in infrastructure for future growth.
The STD code of these cities has five digits.
Tier-IV cities have a population between 10,000 and 19,999 people. They are cities or small towns, which require extensive infrastructure and investments. They also have negligible business and real estate activities.
Tier-II and Tier-III cities have several industrial clusters and are situated in business-friendly states, and are well connected to other major economic hubs. The most significant edge these cities have over larger cities is their economical real estate, labour and service costs.
Moreover, the pandemic has accelerated the movement of metropolitan dwellers to Tier-II and Tier-III cities to get away from polluted and crowded environments and access affordable housing in competitive education and job opportunities.