Urban consumption growth appears to be showing signs of improvement and given India's favourable demographics and rising disposable income, this trend is likely to continue in future as well, says a Morgan Stanley report.
The AlphaWise City Vibrancy Index (ACVI) has registered a 66 per cent rise since 2011 and during this period the country's financial infrastructure sector has witnessed the fastest growth rate.
AlphaWise City Vibrancy Index is a measure of the drivers of urbanisation. It incorporates key ingredients that drive urbanisation including infrastructure, job creation, modern consumer services and the city's ability to mobilise savings. The index reveals the relative growth of urbanisation in India's top 200 cities.
With regard to financial infrastructure, the report said "ATMs have been the key driver for the strong growth".
The annual growth in ATMs has been about 25 per cent for the top 50 and top 200 cities, it added.
According to the global financial services major, urbanisation growth is likely to continue for years to come on account of favourable demographics and rising disposable income levels in the country.
"We base this on our data, which suggest that the density of the drivers is still not enough to meet the requirements and income of the population," the report added.
The AlphaWise City Vibrancy Index increased 5 per cent for the six-month period ending March 2015.
During this period, consumption index rose 8 per cent, followed by job opportunities index (5 per cent) and the financial infrastructure index (2 per cent).
As per the report, the consumption index growth was the fastest for top 200 cities. The fastest growing consumption segments for the top 200 cities include multiplexes, retail apparel and restaurants.
As per the report, Bengaluru, Pune and Chandigarh are the most vibrant cities.
"Chandigarh and Raipur are top ranked in the consumption index, Bengaluru and Pune lead in job opportunities and Nashik and Varanasi rank at the top in the financial infrastructure index," the Morgan Stanley report said.
Among the top 200 cities by population, Noida, Gurgaon, Hisar, Bengaluru and Pune are the most vibrant ones.
Noida, Gurgaon and Chandigarh rank the highest in the Consumption Index. In terms of job opportunities, Noida, Gurgaon and Bengaluru lead the pack and Belgaum, Faizabad, and Mahbubanagar are the top 3 for financial penetration, the report added.