India’s upcoming 2027 Census will continue to use statutory notification and established Census criteria to identify urban settlements. While this maintains consistency with earlier Census exercises, it may not fully reflect the country’s rapidly changing urban landscape, where economic activity, infrastructure and population increasingly extend beyond municipal boundaries. This has renewed the debate over a comprehensive National Urbanisation Policy (NUP).
Understanding India’s Urbanisation
India’s urbanisation is expanding unevenly across cities, towns and peri-urban areas. In 2011, around 377 million people lived in nearly 8,000 urban settlements. Since then, States have notified additional statutory towns.
The UN projects India’s urban population to exceed 720 million by 2050. At the same time, peri-urban areas are expanding faster than established city boundaries, highlighting the limitations of conventional administrative definitions.
Recent policy initiatives, including support for City Economic Regions (CERs) and urbanisation-linked fiscal incentives, indicate growing recognition of functional urban regions.
Limitations of the Rural-Urban Binary
India’s classification of settlements largely creates a rural-or-urban distinction, even though many areas exist along a continuous urbanisation spectrum.
Governance Gaps
Under Article 243Q, States have a significant role in notifying areas as urban. However, urban designation does not automatically ensure the transfer of all municipal functions listed under the Twelfth Schedule, creating institutional gaps.
Peri-Urban Governance Deficit
Rapidly transforming areas around major cities often continue under rural governance despite predominantly non-agricultural employment. Such regions can face inadequate capacity for land-use planning, waste management, water services and environmental regulation.
Weak Spatial Planning
A significant proportion of statutory and census towns lack updated master plans. Outdated planning frameworks can contribute to unplanned expansion, infrastructure deficits and environmental stress.
Why India Needs a NUP
A National Urbanisation Policy could provide common principles for coordinating urban development while allowing States and local governments to adapt solutions to local conditions. It can strengthen planning, finance, institutional capacity and cooperation across different levels of government.
Seven Systemic Transformations
Standardise Urban Classification
Use uniform criteria, periodic reviews, satellite imagery and geospatial data to identify emerging urban settlements.
Modernise Spatial and Regional Planning
Strengthen regional planning and make peri-urban planning an integral part of rapidly urbanising areas.
Reform Urban Finance
Improve property-tax collection, predictable fiscal transfers, project capacity and access to innovative financing.
Establish a Coordination Architecture
A National Urbanisation Council could improve coordination among existing institutions and government levels.
Align Sectoral Reforms with Functional Geographies
Urban challenges should be addressed at appropriate scales such as city regions, airsheds and river basins, rather than being restricted by administrative boundaries.
Align Urban Politics with Reform Incentives
Transparent fiscal transfers and performance-linked incentives can encourage better municipal governance.
Promote Knowledge Exchange and Innovation
Knowledge networks, technical assistance and local innovation can help cities develop solutions suited to their specific needs.
Conclusion
India’s changing urban geography requires governance systems that move beyond a rigid rural-urban divide. A well-designed National Urbanisation Policy can help align planning, finance and institutions with emerging city regions, supporting more equitable, productive, low-carbon and resilient urban development.
FAQs - National Urbanisation Policy
What is a National Urbanisation Policy?
It is a proposed framework for coordinating how India plans, finances and governs urban growth, including development beyond municipal boundaries.
Why does India need to rethink the rural–urban divide?
Cities and surrounding villages often share labour markets, transport networks and public services. Planning for them separately can overlook these connections and leave gaps in infrastructure and service delivery.
What is a city region?
A city region includes a central city and nearby towns, suburbs and villages linked to it through commuting, trade and shared infrastructure. It can extend across several administrative boundaries.
How could a National Urbanisation Policy improve urban governance?
It could help local bodies and state agencies coordinate land use, transport and public services, while aligning funding with priorities shared across the city region.
How could the policy make urban growth more equitable and resilient?
It could prioritise affordable housing and basic services, improve access to jobs through public transport, and help communities prepare for risks such as flooding and extreme heat.
