Urbanization in India

Introduction

• Urbanization in India is reaching a critical juncture, with over 35% of the population residing in cities, as per Census 2011. 
• By 2050, this number is expected to soar to 50%, according to UN Habitat. 
• The NITI Aayog’s Urban Planning Reform Report (2021) highlights that urban areas currently contribute around 63% to the GDP, a figure projected to reach 75% by 2030. 
• However, despite this rapid urban expansion, Indian cities rank low on global urban indices like the Mercer Quality of Living Index and the Economist Intelligence Unit’s (EIU) Global Livability Index. 
• The Economic Survey 2023-24 underscores urban transformation as a key pillar in realizing the vision of a Viksit Bharat.

What are Urban Settlements? 

• Urban settlements in India can be categorized into various types, reflecting diverse urbanization trends and development patterns:
• Census Towns – Defined by a population of at least 5,000, a minimum density of 400 persons per sq km, and over 75% of the male workforce engaged in non-agricultural activities.
• Statutory Towns – Officially recognized by the state government, these towns have designated urban local bodies such as municipal corporations or municipalities overseeing governance.
• Satellite Towns – Smaller towns developed near major urban centers, relying on them for economic, social, and infrastructural support while helping decongest the primary city.
• Urban Agglomerations – Clusters of a core city or town along with its adjoining suburbs and outgrowths, forming a continuous urban landscape.
• Outgrowths – Smaller settlements that have expanded beyond an urban area’s limits but remain administratively distinct, often serving as extensions of a city or town.
• Over-Urbanization – A condition where cities expand beyond sustainable limits, leading to overuse of resources, infrastructure strain, and declining living standards.
• Suburbanization – The outward expansion of cities into peripheral rural areas, transforming them into urban zones with improved connectivity and infrastructure.
• Counter-Urbanization – A reversal of urban migration trends, where people and businesses relocate from congested cities to rural or semi-urban areas in search of better living conditions and lower costs.

Present Status of Urbanization in India

• Housing and Livability: 

• • • India faces a housing shortage of 18.78 million units, primarily affecting low-income groups (MoHUA).
    • Slums constitute 17% of urban households (Census 2011), leading to inadequate sanitation and poor hygiene conditions.
    • Indian cities score low on the Mercer Quality of Living Index due to poor livability conditions.

• Infrastructure and Smart Cities: 

• • • Poor road infrastructure and inadequate public transport remain major challenges in metropolitan areas (NITI Aayog’s Mobility Report 2022).
    • Traffic congestion costs India nearly $22 billion annually (Ministry of Road Transport and Highways).
    • The Smart Cities Mission (2015) aimed to develop 100 smart cities, but only 50% of projects have been completed (NIUA).

• Urban Governance: 

• • • The number of census towns increased from 1,362 in 2001 to 3,894 in 2011, driving urban expansion but lacking proper infrastructure and governance.
    • Delayed recognition of urban areas results in unplanned growth and regional disparities.

• Environmental Sustainability: 

• • • Air pollution levels in major cities like Delhi, Mumbai, and Kolkata exceed WHO safety standards (State of Global Air Report 2023), costing India nearly $95 billion annually (Clean Air Fund).
    • Half of India’s 603 rivers are polluted, with critical contamination in the Yamuna and Ganga (CPCB 2022).
    • Only 30% of wastewater is treated before disposal, worsening urban water pollution.
    • Cities frequently experience extreme weather events such as flooding in Mumbai and Bengaluru and heatwaves in Delhi, where temperatures approach 50°C.
    • Poor drainage systems and lack of green infrastructure exacerbate these issues.

• Economic and Employment Hubs: 

• • • While Indian cities contribute over 60% to the national GDP, unemployment remains high, especially in the informal sector (PLFS 2022).
    • Delhi, Mumbai, and Bengaluru alone contribute over 30% to the national GDP.

• Public Services and Livability: 

• • • Only 62% of urban households have access to piped water supply (Jal Jeevan Mission Report 2023).
    • Sanitation has improved under Swachh Bharat Mission 2.0, but inadequate sewage treatment continues to impact water quality.

• Social Inclusion and Safety: 

• • Women’s safety remains a significant concern, with NCRB data (2022) highlighting high crime rates in urban areas.
  • Urban poverty and marginalization continue to hinder equitable development.

Significance of Urban Transformation in India

• Economic Growth and Global Competitiveness: A well-planned urban environment fosters investment, innovation, and economic prosperity. Cities like Singapore, Dubai, and Shanghai have leveraged urban planning to attract global businesses, boost tourism, and enhance economic output. 

• India’s major cities, such as Mumbai, Bengaluru, and Delhi, contribute over 30% of the national GDP and serve as critical financial and technological hubs.

•  Smart urbanization, driven by initiatives like the Smart Cities Mission and Digital India, can propel India toward its ambitious goal of becoming a $10 trillion economy by 2035 (NITI Aayog). 

• Additionally, integrated Special Economic Zones (SEZs) and urban-industrial corridors such as the Delhi-Mumbai Industrial Corridor (DMIC) can enhance global trade competitiveness.

• Global Cities:  Several international cities serve as models for India’s urban transformation:

• • • Dubai has emerged as a global business hub due to its business-friendly policies, tax incentives, and futuristic urban planning, with projects like Palm Jumeirah and the Dubai International Financial Centre (DIFC) attracting multinational corporations.
    • Singapore exemplifies clean governance, sustainable urbanization, and advanced smart city initiatives such as real-time traffic monitoring, automated waste disposal, and extensive vertical greenery that mitigate pollution and heat stress. India can adopt best practices from these cities to improve urban infrastructure, governance, and sustainability.
    • Bangkok is known for its efficient metro system, tourism-friendly infrastructure, and well-connected transport networks, making it a hub for both business and leisure.
    • London sets a benchmark with its seamless public transport system, expansive green spaces like Hyde Park, and thriving cultural and economic districts such as Canary Wharf and the West End.

• Enhanced Livability: Well-planned cities enhance healthcare, education, public transport, and essential services, improving overall quality of life. 

• For example, Mumbai’s metro expansion and Bangalore’s suburban rail project are expected to ease congestion and improve connectivity. 

• Sustainable housing solutions like the Pradhan Mantri Awas Yojana (PMAY) aim to provide affordable homes, reducing urban slums, which still house 17% of the urban population (Census 2011). 

• A cleaner and well-managed urban environment can boost India’s Human Development Index (HDI) ranking, which currently lags due to issues such as poor sanitation and lack of access to clean water.

• Climate Resilience and Sustainability: Rapid urbanization has intensified environmental challenges such as air pollution, heat islands, and inadequate drainage systems. 

• Cities like Delhi, Mumbai, and Kolkata frequently exceed WHO air quality safety limits, costing India nearly $95 billion annually (Clean Air Fund).

•  Implementing green infrastructure, including urban forests, green rooftops, and wetland conservation, can significantly improve air and water quality.

•  The Miyawaki afforestation technique, adopted in Bengaluru and Chennai, has demonstrated success in creating dense, self-sustaining green spaces in urban settings. 

• Moreover, aligning urban planning with UN Sustainable Development Goal 11 (Sustainable Cities and Communities) can ensure resilience against climate-related disasters such as urban flooding and heatwaves, which have become increasingly common in India’s metropolitan areas.

• Social Equity and Quality of Life: Equitable urban development is crucial for fostering inclusive growth. 

• Expanding metro connectivity, particularly in tier-2 and tier-3 cities, will improve mobility and economic opportunities. 

• Additionally, gender-sensitive urban planning is critical, as 95% of women in Delhi report feeling unsafe in public spaces (UN Women 2023). 

• Improved street lighting, gender-responsive public transport policies, and safe urban design—such as women-only compartments in metros and CCTV surveillance in high-risk areas—can significantly enhance safety and accessibility. 

• Furthermore, addressing urban poverty, which affects 25% of the population (NSSO 2020), requires integrated policies focusing on education, skill development, and employment generation to ensure an inclusive and just urban transformation.

Government Initiatives For Promoting Urban Development

• Jawaharlal Nehru National Urban Renewal Mission (JNNURM) (2005): Aimed at modernizing urban infrastructure by providing financial assistance to urban local bodies for projects related to water supply, sanitation, roads, and public transport.
• National Urban Transport Policy (2006): Focuses on developing sustainable urban transport systems by promoting public transit, pedestrian-friendly infrastructure, and non-motorized transport options to reduce congestion and pollution.
• National Urban Housing and Habitat Policy (2007): Seeks to ensure affordable housing and improved living conditions, particularly for economically weaker sections, through measures such as rental housing, slum redevelopment, and increased private sector participation.
• Deendayal Antyodaya Yojana – National Urban Livelihoods Mission (DAY-NULM) (2013): Aims to reduce urban poverty by enhancing skill development, promoting self-employment, and improving access to financial services for marginalized communities.
• Heritage City Development and Augmentation Yojana (HRIDAY) (2014): Focuses on revitalizing 12 heritage cities by conserving their cultural assets while enhancing tourism infrastructure and urban planning.
• Swachh Bharat Abhiyan (2014): A nationwide sanitation campaign promoting waste management, toilet construction, and cleanliness drives, significantly improving hygiene standards in urban areas.
• Pradhan Mantri Awas Yojana (PMAY) (2015): Aims to achieve “Housing for All” by providing affordable housing to urban poor through subsidies, interest rate incentives, and slum rehabilitation programs.
• Smart Cities Mission (2015): Targets the development of 100 smart cities with technology-driven solutions for urban management, including intelligent traffic systems, digital governance, and sustainable energy initiatives.
• Atal Mission for Rejuvenation and Urban Transformation (AMRUT) (2015): Focuses on improving urban infrastructure, particularly in water supply, sewerage, and drainage, to enhance the quality of life in cities.

Challenges of Urbanization in India

• Infrastructure Deficiencies: Unplanned urban sprawl in India has led to significant inefficiencies in transportation, housing, and basic amenities. The World Bank estimates that India needs to invest $840 billion in urban infrastructure by 2036 to address these challenges. 

• Currently, only 35% of urban roads are in good condition, leading to increased traffic congestion and longer commute times (MoHUA 2023). 

• The urban housing shortage stands at 18.78 million units, disproportionately affecting the economically weaker sections (EWS) (RBI 2023).

•  Moreover, water scarcity is a growing issue, with cities like Bengaluru and Chennai projected to face severe water shortages by 2030 if sustainable management practices are not implemented.

• Environmental Constraints: Indian cities are struggling with waste management, pollution, and ecological degradation. They generate 62 million tonnes of solid waste annually, yet only 25% is scientifically processed under the Swachh Bharat Mission (2023). 

• Landfills in Delhi, Mumbai, and Kolkata are already beyond capacity, contributing to air and groundwater pollution. 

• Additionally, air pollution is responsible for nearly 1.67 million deaths in India annually (Lancet 2021). 

• Water bodies are also under severe stress, with 40% of India’s urban wastewater left untreated, leading to contamination of rivers such as the Yamuna and Ganga (CPCB 2023). 

• Sustainable waste management solutions, including waste-to-energy plants and circular economy initiatives, need urgent implementation.

• Governance Issues: Urban planning in India remains largely reactive rather than proactive, resulting in haphazard growth and inadequate service delivery. 

• According to the Ministry of Housing and Urban Affairs (MoHUA 2023), 60% of India’s urban areas lack structured development plans, leading to inefficient land use and encroachments. 

• Bureaucratic delays, corruption, and weak enforcement of zoning laws further exacerbate urban chaos. 

• The Smart Cities Mission has shown mixed results, with only 30% of planned projects completed by 2023 (NITI Aayog).

• Social and Economic Challenges: Income inequality and urban poverty remain significant issues, with 25% of urban dwellers living below the poverty line (NSSO 2020). 

• Slums and informal settlements house over 65 million people, often lacking access to clean water, sanitation, and healthcare (Census 2011). 

• Mumbai’s Dharavi, Asia’s largest slum, accommodates nearly 1 million people in just 2.1 sq km, highlighting extreme population density and inadequate living conditions. 

• Unemployment and underemployment remain high, particularly among youth, with urban unemployment standing at 6.7% (PLFS 2023). 

• Pollution, Congestion, and Poor Public Services: Urban pollution levels remain alarmingly high, with Delhi, Mumbai, and Kolkata frequently ranking among the world’s most polluted cities.

•  Vehicular emissions contribute 51% of Delhi’s air pollution (SAFAR 2023). 

• Traffic congestion is another critical issue—Kolkata, Bengaluru and Pune are among the top 5 most congested cities globally. (TomTom Traffic Index 2024). 

• Public services, including healthcare and education, are stretched beyond capacity, with India having only 1.3 hospital beds per 1,000 people, far below the WHO-recommended 5 beds per 1,000. 

• Financial Constraints: India’s urban infrastructure financing remains inadequate, with municipal revenues contributing just 1% of GDP, far lower than 7.4% in South Africa and 6% in Brazil (World Bank 2024). 

• Property tax compliance is low, with only 37% of urban properties registered under municipal tax rolls (MoHUA 2023). 

• Additionally, many municipalities depend heavily on central and state government grants, limiting their ability to fund local development.  For instance, Delhi’s municipal corporations (MCDs) relied on ₹4,000 crore in state grants, with property tax contributing less than 30% of total revenue (MCD Budget 2023-24).

 Way Forward

• Smart and Resilient Urban Planning:
  • Implement integrated urban planning models like Singapore’s Master Plan 2019.
  • Develop satellite towns to decongest major metropolitan areas.
• Environmental and Climate Resilience Strategies:
  • Increase urban green spaces through initiatives like Miyawaki forests.
  • Implement waste-to-energy plants and circular economy models inspired by Sweden.
• Strengthening Urban Governance and Financing:
  • Enhance the financial autonomy of Urban Local Bodies (ULBs) through municipal bonds and Public-Private Partnerships (PPPs).
  • Ensure census towns receive formal urban status to access funding and resources.
  • Implement participatory governance models, drawing from Curitiba, Brazil.
• Leverage the Urban Challenge Fund:
  • Use the ₹1 lakh crore Urban Challenge Fund to incentivize cities to adopt long-term planning, invest in mass transit, and enhance sustainability.
• Green Infrastructure and Sustainability:
  • Develop Blue-Green Infrastructure like urban wetlands, green roofs, and afforestation.
  • Promote electric mobility; FAME-II has accelerated EV adoption, but further incentives are required.
• UN-Habitat and Global Sustainability Goals:
  • Align urban policies with SDG-11: Sustainable Cities and Communities.
  • Integrate UN-Habitat’s New Urban Agenda principles into national planning frameworks.
• Sustainable Infrastructure Development:
  • Expand metro rail networks and Bus Rapid Transit Systems (BRTS) to improve public transport.
  • Promote transit-oriented development to reduce congestion and encourage walkability.