The rapid growth of metropolitan suburbs is the most striking feature of spatial transformation in South Asian cities. Reduced carrying capacities of these metropolitan areas are pushing business and people out of their urban core, relocating them in the immediate suburbs and peripheries. Such relocation of industry and commerce or migrant residents are changing the very look and feel of the surrounding villages resulting into emergence of a zone of transition or peri-urban as it is popularly known, wherein urban and rural development processes meet, mix and inter-react (Narain, 2010). However, challenge lies in managing these transitory spaces sustainably as they are institutionally rural but look and feel urban. One of the critical gaps that policy makers often argue of is not having any specialized institutional arrangements and absence of any specific indicators for identification and delineation of peri-urban interface. Following article attempts to address this gap by determining the thresholds that meaningfully distinguish between the urban, peri-urban and rural areas across India. The idea is to go beyond the conventional spatial analysis to a process-based economic modelling, wherein the social dynamism and flux can be clearly brought out to classify 40 sub-districts/taluks of Hyderabad Metropolitan Development Authority’s area.