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Orissa is one of the least urbanized states in India, with 11.8 percent of urban population to total population. But the process of urbanization in Orissa as compared to India is characterized by the high rate of urban growth. Orissa has registered a higher urban growth between 1951 and 1981, in that the urban population of this State increased by 5.2 times, against 2.5 times increase in an all India basis.

According to the 1981 census, the Class I towns having a population of one lakh and above (6 towns) have taken the largest share of urban population of 35.53 percent to total urban population of 33.1 lakh, out of which Cuttack and Bhubaneswar alone with a population of 3.27 and 2.19 lakh respectively account for about 17.5 percent of the State’s urban population.

Cuttack city had the distinction of being the capital of Orissa before the formation of the new capital of Bhubaneswar. But it plays an important role as the ‘commercial capital’ of the entire region, very similar to the role played by the district of Ernakulam and Cochin city in Kerala. Notwithstanding the fact that Bhubaneswar is the Capital of Orissa, the administrative and the institutional importance of Cuttack has not dwindled as yet, and a number of important government offices with statewide jurisdiction including the High Court, are located in the city. This status is enjoyed by in Kerala by this one district. Also in the case of major developments like the proliferation of high cost luxury Villas Ernakulam district has a prominent place above the rest.

Bhubaneswar became the capital of Orissa in 1948 and since then the various Departments of the Government have been shifted from Cuttack to Bhubaneswar. Gradually a number of State-level offices and institutions have come up in the capital city. Bhubaneswar continues as the principal administrative center of the state, a center of industrial activities, and continues to attract a number of institutions of national importance.