Blitz Bureau
NEW DELHI: The cities in India are no longer just centres of habitation; they are the primary engines of economic growth. With nearly a third of the population already urban and rising steadily, pressure on urban systems is intensifying. Yet, the policy framework governing cities appears out of step with the pace and the scale of this transformation. The issue is no longer whether India needs to rethink its urban policy, it is how urgently it must do so.
Structural mismatch
Consider the structural mismatch. Cities are expected to deliver productivity, jobs, and innovation, but remain constrained by fragmented governance, restrictive land-use norms, and limited financial autonomy. Urban local bodies, which should anchor the management of a city, are weak in both capacity and resources. Decision-making is split across multiple agencies, leading to delays and diffused accountability. The result is evident in congested infrastructure, inadequate housing, and uneven access to services.
For the real estate sector, these constraints translate into higher costs and slower execution. Realty major DLF’s Chairman Rajiv Singh has pointed to the need for faster approvals and clearer policies, noting that delays in land and regulatory clearances extend timelines and inflate costs. Similarly, real estate developers’ body Naredco’s Chairman Niranjan Hiranandani has argued that outdated planning frameworks are holding back growth, stressing that policy must keep pace with urbanisation if cities are to remain livable and investment-friendly.
Cities are expected to deliver productivity, jobs, and innovation, but remain constrained by fragmented governance, restrictive land-use norms, and limited financial autonomy
The consequences extend beyond real estate. Poor planning affects productivity through long commute times, unreliable infrastructure, and rising environmental stress. Cities like Bengaluru and Mumbai illustrate how infrastructure gaps and unplanned expansion can erode efficiency. Water shortages, congestion, and pollution are no longer peripheral concerns; they are central to business costs and quality of life.
Major challenge
A key challenge is how India manages its urban transition. Many fast-growing settlements function as urban centres but lack formal recognition, limiting access to funding and planning tools. This creates a governance gap where economic activity outpaces institutional capacity. At the same time, pricing distortions in land and utilities encourage inefficient usage and strain public resources.
The solution lies in a more predictable policy environment. A top realty stakeholder has highlighted the importance of infrastructureled urbanisation, suggesting cities must be planned around connectivity to sustain growth. This aligns with a broader industry view that policy should shift from schemes to outcomes – efficient mobility, affordable housing, and sustainable resource use.
India’s urban future will depend on whether governance can match economic ambition. This will also require greater private sector participation, improved data-driven planning, and stronger coordination between Central, state, and local authorities.
Without reform, urbanisation risks becoming a constraint rather than a catalyst for growth. The coming decade will be decisive in shaping this transition, determining whether cities can sustain inclusive and resilient economic expansion.
