NEW DELHI: The Economic Survey tabled in Parliament on Thursday proposed that every million-plus city should be required to prepare a statutory 20-year City Spatial and Economic Plan.
The plan needs to be updated every five years, with three non-negotiable elements - a transport network plan, housing supply plan with annual unit targets, and a land-value capture framework linked to infrastructure corridors, it noted.
It further stated that future urban policy must prioritise system performance over standalone projects integrating housing, mobility, sanitation, climate resilience, and finance while designing liveable, climate-ready cities that support inclusion and long-term economic efficiency.
The promise of building India’s urban future lies in making our cities economically dynamic, socially inclusive, environmentally sustainable and institutionally capable, the Survey also said.
The Survey also underlined that India is already deeply urban in economic terms, with the majority of its national output generated in cities and in urban areas. The task now is to make that urbanisation work better for citizens in tangible and intangible ways, it added.
The survey positioned cities as economic assets that require deliberate investment and strategic planning. It stated that recognition of cities as economic infrastructure is a necessary first step toward aligning public policy, fiscal priorities, and planning frameworks with India’s development trajectory.
According to the Economic Survey India is far more urban in economic and functional terms than official definitions suggest. Based on satellite data from the Global Human Settlements Layer (GHSL) of the Group on Earth Observations at the European Commission, India was 63 percent urban in 2015, which is nearly double the urbanisation rate reported in the 2011 Census.
The Economic Survey maintained that the World Bank also estimated that by 2036, India’s towns and cities will be home to 600 million people, or 40 per cent of the population, up from 31 per cent in 2011, with urban areas contributing almost 70 per cent to GDP.
The Government has taken a series of concerted efforts to address the financing requirements of city and urban development. The Urban Infrastructure Development Fund (UIDF), announced in the Union Budget 2023–24 with an initial outlay of Rs 10,000 crore, was designed as a revolving fund routed through financial institutions to support Tier-2 and Tier-3 cities that lack creditworthiness but have viable infrastructure projects, said the Economic Survey 2025-26.
It also highlighted that over the past decade, the central government has undertaken one of the most ambitious and largest sanitation and waste management programmes globally under the Swachh Bharat Mission -Urban (SBM–U), complemented by investments under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and AMRUT 2.0. These measures have yielded visible gains in sanitation outcomes, with the most notable being the elimination of open defecation across all cities, the document stated.
Door-to-door collection of municipal solid waste (MSW), which was negligible in 2014–15, has expanded to 98 per cent of urban wards by 2025–26, supported by a fleet of over 2.5 lakh waste collection vehicles nationwide, according to the survey.