Urbanisation has played and will continue to play a critical role in India’s growth story in the 21st century. By some estimates, Indian cities already contribute up to 70% of the country’s GDP. Yet, depending on which official estimates you use, India is just 26% or 31% urban. But there is growing evidence that India is more urban than is officially recognised.
Even as many of India’s urban areas go unacknowledged, its existing towns and cities suffer from serious neglect. Air quality and congestion are worsening, house prices continue to soar, and amenities and services like clean water, public spaces, public transport, and solid waste management are severely deficient. The local bodies entrusted to govern cities do not have sufficient finances, expertise, or personnel to plan for and address these challenges.
At their core, cities are labour markets. People move to cities for jobs and opportunities. Well-functioning and diverse cities allow for the sharing and cross-pollination of ideas, which in turn drive greater productivity. Access to affordable housing and transit options that allow workers and city residents to commute easily between home, work, schools and other places is also crucial for improving productivity. Conversely, poorly managed and planned cities can erode productivity and impair quality of life of citizens.
Indian cities need urgent reform in order to unlock their economic potential and transform quality of life. Reforms must focus on addressing the systemic dysfunctions – in land markets, planning regulations, governance structures and so on – that hold our cities back. This reform agenda is by no means exhaustive, but highlights some of the critical areas that the new government should focus on.