India’s cities sit at the heart of its growth story, driving economic activity and promising a better life to citizens. Yet many are buckling under pressure—from choking traffic and unchecked sprawl to worsening air quality.
Despite significant infrastructure spending, weak city systems—fragmented governance, limited planning capacity and poor data use—are holding back both productivity and liveability, according to a recent report, Shaping Urban India: By Design, Not By Default, by Janaagraha, a Bengaluru-based non-profit.
India has urbanized at a fairly steady clip, broadly in line with its G20 peers. But fine feathers don’t always make fine birds.
Estimates by the United Nations’ Degree of Urbanisation (DegUrba) show that about 84.1% of India’s population qualifies as urban. Other estimates place India’s urbanization rate between 36% and 55%. However, India’s per capita income—even in PPP terms—remains far behind other G20 countries, limiting economic mobility.
Janaagraha’s estimates show that even when an Indian city doubles its urbanization rate, its economic productivity increases by only 12% on average. This compares with 17% in some African countries and 19% in China.
Sprawling cities
India’s cities are expanding, but often in unplanned ways. Among the top 10 densely populated cities, the contiguous built-up area increased sharply between 2001 and 2020. Pune and Bengaluru led this expansion, with built-up areas rising 109.5% and 85.2%, respectively.
“Urban areas have added 2.5 million hectares between 2005-06 and 2022-23 — a 35% growth driven largely by unplanned sprawl, with 16 cities showing a periphery-to-core ratio greater than 1,” the report highlighted.
This means the population is being pushed to the periphery, leading to longer commute times, rising congestion, noise, flooding, and lack of city services such as water supply and waste management. At its core, Indian cities are not growing by design, but by default.
What explains this gap? A big part of the answer lies in how much investment is going into the development of Indian cities and how they are operated on the ground.
Investment catch
Indian cities have no dearth of funding, but allocations are heavily skewed toward housing and metro rail projects. The housing and urban affairs ministry’s allocations crossed ₹1 trillion in FY22 before tapering, the report added.
However, much of this spending is directed towards Pradhan Mantri Awas Yojana (PMAY) and metro rail projects. Removing these components leaves only about a third of the allocation, which has seen limited growth over the years.
Despite PMAY-U being a flagship programme that receives, on average, 25% of the allocation budget, sanctioned units address only 6% of the 30 million affordable housing gap, the report noted.
Fragmented governance
Governance gaps remain a structural bottleneck.
Urban Local Governments (ULGs) function largely as nodal agencies implementing mandates from union and state governments, rather than as fully empowered democratic bodies. Only five states have municipalities exercising full control over all core city functions.
In most cities, urban planning, land regulation, water supply, sanitation and environmental management are handled by multiple agencies. In Mumbai, six agencies manage urban planning and land regulation. In Chennai, this number rises to eight. In Bengaluru and Gurugram, key functions are handled by three to five agencies.
According to Sarada Muraleedharan, former chief secretary, Kerala government, sustainable solutions will not be found unless city governments have the autonomy to address the needs of their citizens and be accountable for the same.
“The tension between local elected leadership and local bureaucracy also has to be addressed with clear jurisdictional boundary demarcation and accountability mechanisms that fix accountability.”
Data dearth
Another aspect impeding the sustainable development of cities is the limited availability of quality data, as well as the poor use of data for decision-making. While data is being generated at the central and state levels, consistent and granular city-wise data remains scarce, incomplete or unreliable.
Some of the top surveys in the country, such as the National Family Health Survey, Periodic Labour Force Survey, and the National Sample Surveys, provide only a few data points at the district level.
“A significant share of administrative data remains locked within state and ULG departments, frequently in non-digitised or semi-digitised formats,” the report said. “This restricts not only public access but also cross-departmental coordination.”
The way forward
Indian cities are unlikely to improve substantially unless accountability gaps are addressed. When someone loses their life due to a collapsed metro pillar, the report highlighted, it is not clear who will be responsible: the UGL, the transport authority, the public works department, the metro authority, the traffic police, or the planning agency.
“Globally, even in peer countries of the Global South, mayors and elected councils are directly accountable to citizens for quality of life in the city,” it added.