India’s urban transformation: The need for a paradigm shift

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India’s cities are at a crossroads. Powering over 60 percent of the country’s Gross Domestic Product (GDP), they hold a key to achieving India’s vision of becoming a US$30-trillion economy by 2047, where ‘vocal for local’ fuels innovation and forges a self-sustainable India that fulfils its net-zero commitment by 2070. However, outdated policies, crumbling infrastructure, and inadequate housing threaten to hamper progress. To lead cities in India into a new era, there is a need for a fundamental transformation that unleashes their potential and prioritises their needs.

The challenge

Despite existing expertise and innovation, fragmentation and information silos impede knowledge-sharing and problem-solving in cities, limiting their ability to address the escalating urban challenges of lack of housing and essential services, and environmental degradation. However, these same challenges also offer opportunities. A transformation in the following two areas of urban governance can help India reshape its urban trajectory and create inclusive, sustainable, and prosperous cities:

• Policy frameworks: Policies must embrace inclusive growth, environmental responsibility, and active citizen participation.
• Institutions: Urban institutions must promote ethical leadership and a culture of collaboration and innovation.

To lead cities in India into a new era, there is a need for a fundamental transformation that unleashes their potential and prioritises their needs.

1. Reimagining urban policy frameworks

National Urban Policies (NUPs) gained worldwide recognition following the United Nations Habitat III ‘New Urban Agenda’ and the Sustainable Development Goals. Envisioned as building blocks for sustainable urban transformation through local-national collaborations, well-designed NUPs can drive positive change. The rigorous evaluation of NUPs, identification of critical success factors, and implementation of innovative solutions can maximise the potential of NUPs. The following paragraphs offer valuable insights from successful NUPs in different parts of the world.

• Singapore: Integrated planning and sustainability with resource efficiency, public housing, and efficient transportation have propelled Singapore’s economic growth while ensuring environmental stewardship and social equity. Its land-use planning emphasises dense, mixed-use development through optimising space and preventing urban sprawl. High-quality public housing and a well-integrated public transport network have reduced congestion and pollution.
• Canada: Canadian cities enjoy fiscal autonomy, allowing them to raise revenue, set local need-based spending priorities, and foster greater accountability within city governments. Some Canadian cities have pioneered participatory budgeting, allowing citizens to prioritise areas for the allocation of municipal funds.
• The Netherlands: Dutch cities prioritise participatory urban design, involving residents, businesses, and other stakeholders in shaping urban spaces and revitalisation projects, from the earliest planning stages to implementation and evaluation. These inclusive strategies actively seek input from marginalised groups, the youth, older people, and those overlooked in traditional planning.
• Colombia: Medellin, Colombia, was once described as the most dangerous city in the world, with astounding gaps between the wealthy and the poor, vastly different access to services, and the highest homicide rates globally. It would eventually pursue social investments to upgrade the infrastructure in informal settlements, provide access to essential services, and build public spaces like libraries, parks, and community centres to foster civic pride. Medellin’s cable car system provides affordable, rapid transit that connects vulnerable communities on steep hillsides to the city’s economic centre, opening up job opportunities and reducing isolation.

For its part, the Indian government—recognising the role of cities in achieving national goals—proposed the National Urban Policy Framework (NUPF) in 2018. As urban development is a state subject, the NUPF empowered states to tailor their urban policies to their unique needs by adopting balanced ‘top-down’ and ‘bottom-up’ approaches. The framework aimed to align capacity building, finance, and governance based on ten core principles to create cities that will promote people’s quality of life, nurture responsive management and sustainability, and foster equal opportunities. However, the NUPF was not fully finalised and implemented.

The rigorous evaluation of NUPs, identification of critical success factors, and implementation of innovative solutions can maximise the potential of NUPs.

India needs to transform its city planning and governance mechanisms through measures that will harmonise economic viability, sustainability, and inclusion. This can be achieved by imbibing learnings from the successful urban revitalisation interventions listed earlier. The following interventions could also enhance the responsiveness of local governments, reduce dependency on higher funding levels, enable participatory practices—from design and implementation to evaluation and monitoring—and catalyse inclusive growth:

• Strategic focus: Prioritise and identify critical themes for targeted impact.
• Multilevel coordination: Emphasise vertical coordination across national, regional, and local levels of government to maximise effectiveness.
• Data-driven governance: Employ robust data systems to inform policymaking, monitoring, and evaluation.
• Fiscal empowerment: Give cities more flexibility by decentralising fiscal authority to align their spending with local priorities.
• Collaborative and participatory: Use various methods, including workshops, design charrettes, online platforms, visualisation tools, and pop-up events to gather feedback and build consensus.

2. Modernising institutions

The quality and effectiveness of urban governance in India will be determined by how the country navigates the functional and financial complexities of urban local bodies (ULBs) to create inclusive urban policies. Fragmented authority, siloed thinking, and bureaucratic delays have hindered progress on the delivery of urban services, revenue generation, and infrastructure development. The immediate need is to strengthen urban governance institutions, which often lack a single, empowered leadership to make critical decisions. The varying capacities and core responsibilities of these institutions necessitate state laws that can address their needs while ensuring funding for essential services, earmarking revenue sources for priority areas, and allowing flexibility within a clear framework by using modern, transparent, and accountable systems. Innovations such as performance-based budgeting, participatory methods, and streamlined approval mechanisms can enhance effectiveness and link spending to strategic priorities.

The Twelfth Schedule of the Indian Constitution and the 74^th Amendment highlight the critical role of municipalities in sanitation, waste management, urban forestry, and ecological protection, which is critical to building climate-resilient cities.

The Twelfth Schedule of the Indian Constitution and the 74^th Amendment highlight the critical role of municipalities in sanitation, waste management, urban forestry, and ecological protection, which is critical to building climate-resilient cities. State governments must carefully craft environmental legislations that empower municipalities under federal and state environmental laws. The knowledge-sharing of global best practices and mechanisms to resolve potential jurisdictional overlaps with environmental agencies is paramount for success.

Overcoming India’s urban transformation challenges

Since 2015, India has focused on tangible, citizen-centric outcomes to address urban challenges through various urban programmes, including Swachh Bharat Mission (SBM),  Atal Mission for Rejuvenation and Urban Transformation (AMRUT ),  and Pradhan Mantri Awas Yojana-Urban (PMAY-U). However, it needs to develop integrated and results-driven innovative models, consolidating resources and streamlining processes to sustain this momentum and further empower cities to prioritise outcomes that directly enhance the quality of urban life. To ensure accountability, funding must be directly tied to measurable outcomes rather than simply project completion. Alongside incentives for innovation, data-driven decision-making will ensure optimal resource utilisation. To build an inclusive, prosperous, and sustainable urban future, India must adopt a multidimensional perspective that incorporates the following elements:

• People-centred development - Place residents, especially the marginalised, at the heart of all urban interventions. - Ensure that policies directly address the needs and aspirations of diverse communities.
• Strengthening urban governance through collaborations

- Empower cities to become the primary drivers of development by providing them the autonomy, resources, and capacity to align with local contexts.

- Craft legislation to empower municipalities, ensuring a clear understanding of how municipal laws interface with existing federal and state environmental regulations.

- Recognise the interdependence of urban and rural areas for balanced development, resource management, and food security.

- Forge strong partnerships between government, businesses, universities, and civil society, creating formal structures to utilise their collective knowledge and problem-solving capabilities.

- Foster strong horizontal coordination between different government departments, and vertically across national, state, and local levels.

- Explore innovative, locally appropriate solutions that enhance inclusivity for underserved areas.

- Resolve jurisdictional overlaps between environmental agencies and municipalities for successful project implementation.

• Data-driven, performance-focused governance

- Shift from project completion to measuring outcomes and incentivising success.

- Develop robust systems to collect, analyse, and share reliable urban data to inform decision-making and promote continuous improvement.

• Integrated and spatial evidence-based strategic planning

- Promote the development of India-specific digital tools and platforms, allowing large-scale input feedback loops and visualising different design options.

- Understand and guide migration patterns, demographics, and evolving social structures, which are crucial for planning liveable cities.

- Strategise the unique needs, potential, and connectivity of large metropolises, mid-sized cities, and smaller towns.

- Ensure a robust infrastructure roadmap, prioritising housing, public spaces, transportation, water, sanitation, and energy, by anticipating future needs.

- Harmonise the built environment and natural forces with policies that promote renewable energy, green spaces, low- carbon solutions, and disaster preparedness, mainstreaming climate actions with city-led nature-based solutions.

- Focus on integrated solutions in neighbourhoods through special urban renewal funds.

• Robust, participatory municipal finance systems

- Empower cities to raise revenue, explore innovative financing models, and align spending with priorities determined through inclusive planning processes.

- Explore diverse funding models, including performance- linked grants, increased fiscal autonomy, impact investment, municipal bonds, green finance, land monetisation, value- capture mechanisms, and carefully designed public-private partnerships.

• Social inclusion prioritising underserved areas

- Identify areas most affected by poverty, crime, and poor infrastructure.

- Learn from successful slum-upgrading models with improved access to transportation, sanitation, water, schools, and public spaces.

- Create formal mechanisms for community-led planning by involving residents in designing their neighbourhoods and partnering with non-government organisations and local groups.

- Prioritise innovative public transport solutions, enhance connectivity for marginalised communities, create economic opportunities, and promote social inclusion.

• Mandating participation and building capacity

- Invest heavily in skilling urban professionals and modernising academic curricula to bridge the research and policy implementation gap.

- Amend legislations, ensuring participatory planning, starting with pilot cities to build evidence for scaling.

- Invest in targeted training of municipal staff and civil society organisations to facilitate effective participation and ensure meaningful engagement.

- Facilitate the large-scale citizen input, feedback, and visualisation of different design options through Indiaspecific digital tools.

- Incentivise inclusivity in project funding and showcase successful examples of participatory urban design to build buy-in.

- Forge formal government, businesses, universities, and civil society partnerships to utilise their expertise and generate a culture of problem-solving innovation.

A call to action

Cities will help define India’s future. Therefore, building just, sustainable, and prosperous cities is a defining challenge of the current era. Urban development is not merely a matter of infrastructure or economic growth; it highlights a profound societal shift that places cities at the heart of development. Through innovations and by drawing from lessons across the world, India’s cities can emerge as beacons of resilience and economic opportunities.

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This essay is part of a larger compendium “Policy and Institutional Imperatives for India’s Urban Renaissance”.

Hitesh Vaidya, Former Director, National Institute of Urban Affairs (NIUA), New Delhi

Chetan Vaidya, Former Director, School of Planning and Architecture, New Delhi     

• Urbanisation in India
• Urbanisation
• India
• inclusive growth
• India's cities
• infrastructure development
• participatory budgeting
• policy frameworks
• sustainable cities
• urban challenges
• urban governance

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