India needs a national urbanisation council to coordinate urban growth: Report

WRI India also cites the United Nations-promoted degree of urbanisation methodology, under which about 61.6% of India’s population is classified as urban

A World Resource Institute (WRI) India report released on Tuesday said India should create a national urbanisation council chaired by the Prime Minister or a designated senior Cabinet minister, along with chief minister-led state urbanisation councils, to coordinate urban growth across ministries and governments

The proposal seeks to address what the authors describe as a fragmented urbanisation system. (Representative Photo)

The proposed national council would set priorities and standards for a National Urbanisation Policy, resolve inter-ministerial conflicts and align centrally sponsored schemes and Finance Commission incentives with urbanisation goals.

The report prepared at the request of the Economic Advisory Council to the Prime Minister (EAC-PM), also proposes common national criteria for deciding when rapidly urbanising rural settlements should become municipalities, and a new system of regional planning to manage growth outside existing municipal boundaries.

The proposal seeks to address what the authors describe as a fragmented urbanisation system.

“In India, no single policy exists that clearly outlines a direction for planning, managing, and governing urbanisation across economic growth, environmental protection and social inclusion,” they said, with urbanisation instead shaped by policies, legislation and programmes spread across sectors, ministries and levels of government.

The report argues that this matters because India’s urbanisation is not confined to established cities. Its urban system ranges from megacities to villages that are becoming small towns, while urban growth is increasingly taking place in areas that remain formally rural.

The report illustrates why the distinction matters.

Census towns are classified as urban by the Census but continue to be managed by rural local administrations, leaving them without urban municipal services and spatial planning capacity.

In Kerala, the number of census towns rose from 99 in 2001 to 461 in 2011, a 366% increase, with almost all urban population growth attributed to new census towns; despite the Kerala Municipality Act recognising Nagar Panchayats as transitional statutory towns, this was not implemented in practice.

West Bengal saw an even larger absolute increase, with census towns rising from 252 to 780 between 2001 and 2011. However, the report says the state also continues with partial legal recognition of functional urbanisation without municipalisation, leaving urbanising areas classified as census towns.

The problem extends beyond settlements that have already crossed the Census threshold.

“Peri-urban growth is pervasive, but there is limited data on it, no established methodology for measuring it, and no policies to manage it and plan for it in India,” the authors said.

They said that Indian cities have generally expanded horizontally into peri-urban areas, while existing Census concepts such as urban agglomerations and outgrowths do not adequately capture the rural-urban continuum.

WRI India also cites the United Nations-promoted degree of urbanisation methodology, under which about 61.6% of India’s population is classified as urban and another 26.66% as peri-urban.

This compares with the 44% urbanisation rate estimated by the UN Population Division’s World Urbanization Prospects 2025, which puts India’s urban population at more than 500 million.

The report says the planning gap becomes particularly visible when major infrastructure is built outside existing statutory boundaries.

In Bengaluru, WRI India’s analysis found that “most strategic projects are located outside the statutory planning boundary” of the Bengaluru Development Authority.

The report says Bengaluru’s Bangalore Development Authority (BDA) controls 582sq km in peripheral Bengaluru after the 2025 Greater Bengaluru Authority transfer, while the Bengaluru Metropolitan Region Development Authority covers 8,005sq km across districts. It attributes delays in expanding statutory planning boundaries to land disputes, environmental opposition and political constraints.

By contrast, WRI India points to Hyderabad’s metropolitan planning structure, where several development authorities were merged into the Hyderabad Metropolitan Development Authority (HDMA) in 2008, enabling planning and infrastructure coordination across the metropolitan region.

The HMDA later expanded its jurisdiction to 10,472sq km up to the Regional Ring Road, explicitly including peri-urban areas, growth corridors and strategic projects.

The proposed solution in the report says is to transform existing Metropolitan Planning Committees, District Planning Committees and development authorities into professionalised City-Region Planning Authorities with clear legal mandates, staffed secretariats and their own revenues. They would prepare regional plans, manage cross-boundary infrastructure and maintain integrated data platforms.

The proposed state councils would bring urban development, town planning, finance, industry, environment, transport, housing and rural development departments together, with a single statutory regional plan serving as the common reference for major investments and regulatory decisions rather than departments following separate spatial priorities.

The financing challenge is substantial. The report estimates that India needs $840 billion in urban infrastructure and municipal services between now and 2036, equivalent to 1.18% of estimated GDP, against current investment of about 0.6% of GDP. More than half the requirement is for basic services including water, sewerage, solid waste, stormwater drainage, roads and street lighting.

The authors say the financing reform is “not an additional centrally sponsored scheme”, but a strengthening of existing channels. They propose aligning public and private finance flows with urbanisation needs and linking Finance Commission transfers and centrally sponsored schemes to compliance with core National Urbanization Policy principles.

Housing pressures have also risen alongside urbanisation. The report cites a 2020 study estimating that India’s urban housing shortage increased from 18.78 million units in 2012 to 29 million in 2018, and argues that housing should be planned alongside transport, infrastructure and employment because peripheral relocation can increase commuting distances and costs.

The report also flags industrial corridors, clusters, special economic zones and townships that develop as isolated economic enclaves around cities, without adequate links to surrounding labour markets and small-town economies. It argues that this weakens regional economic linkages and makes corridor-led growth less inclusive.

Climate resilience and human development form the other major strands of the proposed policy. WRI India says statutory urban and regional plans largely lack integrated climate-resilient frameworks, while city climate action plans generally remain confined to municipal boundaries and lack statutory authority. It also identifies migration, deprivation among children and youth, and gendered exclusion as challenges to equitable urban growth.

The report identifies seven broad transformations, including standardising urban classification, modernising regional planning, reorienting finance and embedding tiered coordination.

Significantly, 79% of its proposed action areas are regulatory, compared with 17% for research and knowledge management and 4% for legislative action, suggesting that much of the framework could be implemented through revised guidelines, institutional arrangements and funding mechanisms rather than new legislation.