Villages or Cities?

I just chanced upon two articles through Rajesh jain's weblog on Emerging Technologies. One of them is in Economist and other one in Mint, an economic daily in India. The article - 'World Goes to Towns' in Economist is a part of their survey on cities, which covers many facets of increasing rate of urbanization. The main argument made in this article is that urbane metroes will be the future and will be the engine of progress for whole modern civilisation. By 2020, 9 cities across the world will touch the figure of almost 20 million inhabitants. In Mint, Atany Dey and Reuben Abraham argue in their article, with similar tones that urbanization is the natural path of human advance and the earlier we get there, better will it be. The name of their article aptly describes this line of thought - 'Can India Afford Its Villages?'
Well. To me this article in Mint looks flawed. The writers say, for example -

Villages are not the proper object of analysis when it comes to economic growth, and hence economic development. By insisting on the development of villages, scarce resources, which could have been more efficiently used elsewhere, are wasted. The same resources can be used in the development of cities. It seems to us that the answer to the development of rural people paradoxically lies in urban development.

The flaw to me here is a visibly rationalistic attitude which treats village as a mere unit in the economy, to which some resources must be allocated and all problems in current societies are merely those of allocation of resources. Look at the Nandigram and Maan /Vagholi SEZ issues that enraged in W. Bengal and Maharashtra. Valuation of a village or land can't be done in monetary terms - a mistake which the economists are doing again and again.
There can't be any debate about the fact that the living conditions of villagers must be improved, but it is not at all convincing that lower living conditions means villages. What about the slums in Mumbai or Delhi then? Those are urbanization minus urbane conditions.
The main question here is not of living conditions off course. The question, as raised by the writers, is of productivity. Productivity and Urbanization are two different things. If we turn all the resources to cities on pretext of low productivity of villages then we will merely force the rural populations to migrate into cities. Even if new city-centers come up to accommodate these immigrants, what about the productivity in farm sector? We would have found no answers to this problem of low agricultural productivity. The results would be completely disastrous for whole economy.
Another curious phenomenon which negates this city-centric resources planning is, that most of the Special Economic Zones come up not on infertile land in some relatively remote places far off from cities. They are, in fact, proposed in close proximity to existing cities only. The logic behind benefit of proximity is clear. There is little infrastructural development in countryside. If we want to develop this infrastructure, again we must shift resources to villages, not cities.