As Minister of State, Mohan Dharia, was too unwell to speak, his inaugural address was read out on his behalf. The National Policy on Urbanisation, he urged, must be "evolved without any delay, because we are all aware of the haphazard growth of our urban centres." The room agreed, and, by evening, considered a Draft National Urbanisation Policy Resolution, 1975. India did not merely feel the need for an urbanisation policy 51 years ago; it wrote one.

Then Nothing Happened

The men in that room were not blind to what was coming. 

Working from the demographic estimates of the day, they recorded that India's urban population stood at roughly 120 million in mid-1974 — about 20% of the country — and projected that it would cross 278 million by 2001. The 2001 Census counted 286 million. They were, if anything, slightly conservative. They saw the wave a quarter-century out. Fifty-one years on, the wave has broken over the country, and India still governs its cities without a national policy.

Official Map Versus Existential Reality

Nowhere is the vacuum starker than in the gap between the India on the government's map and the India on the ground. By a census rulebook essentially frozen since 1971, barely a third of Indians are counted as urban. But the country is already another place: satellite data for 2015, cited in the Economic Survey 2025-26 itself and echoing the World Bank's finding that India's true urbanisation is badly undercounted, show that more than half of India — by some measures around 63% — already lives in settlements that are urban in form and function. 

A third or more of urban India is thus governed as rural: towns in all but name, run by village panchayats, receiving rural schemes and escaping every urban norm. A nation cannot plan what it refuses to count.

Long Anti-Urban Tilt

That neglect was not an accident of administration; it was a disposition. 

For much of its independent life, the republic located its soul in the village and treated the city as, at best, a necessary evil — an ambivalence that runs from Gandhi's insistence that India lived in her seven lakh villages to a planning tradition that saw urbanisation as a problem to be contained rather than a transformation to be governed. 

Central schemes flowed to the countryside; the city was left to the residual attention of overstretched states and powerless municipalities. The consequence is visible from any Indian flyover: growth without a drawing. 

Two-thirds of the country's urban settlements have no master plan, and where planning is absent, the developer, the encroacher and the periodic amnesty for unauthorised construction have filled the void. 

The Stirring — And Its Limits

To its credit, the state has begun to stir. NITI Aayog, through its Managing Urbanisation Division, has argued that the road to a thirty-trillion-dollar Viksit Bharat by 2047 runs squarely through India's cities — its own million-plus cities already generate close to 60% of national GDP while housing barely a third of the urban population. 

India's city governments are hobbled by fragmented institutions, thin revenues, and, above all, an absence of accountable leadership — the elected mayor is largely ceremonial, with real executive power resting in a state-appointed commissioner who answers upward to the state government rather than outward to the citizen. 

As NITI Aayog member Rajiv Gauba writes in his foreword to the framework, "without empowered city governments, India cannot fully unlock the economic potential of its cities." That is the void its April 2026 report, Moving Towards Effective City Government, sets out to fill. It calls for directly elected mayors with fixed five-year terms as the executive heads of city government, supported by a mayor-in-council holding clear portfolios; the consolidation of six core municipal functions — water, sanitation, solid waste, urban planning, fire services and public bus transport — under the city itself; the reorganisation of the parastatal agencies that today run the city so that they report to the city government rather than to state departments; and stronger municipal finances through State Finance Commissions constituted on time and far better access to the bond market. 

Money too has begun to move: a ₹1 lakh crore Urban Challenge Fund and the new City Economic Regions of the 2026-27 Union Budget signal a Union finally willing to spend on its cities. But money without a policy frame is a cheque without a plan — it can finance a flyover; it cannot legislate a city government.

The diagnosis, in short, is now official and largely correct. What is missing is the same thing that was missing in 1975: not analysis, but an instrument. A think tank framework, however sound, binds no one; a report is a recommendation, not a law. India has written the prescription a dozen times over half a century. It has never once signed it.

Ten Challenges 

A policy worth the name must be measured against the fractures it is meant to heal. Ten are now urgent, and non-negotiable.

One, the great undercount. A boundary-and-headcount definition frozen since 1971 hides a third or more of urban India; the policy must redefine "urban" using satellite and density data, so the country finally counts the cities it has.

Two, the housing and slum deficit. With a shortfall of nearly 19 million urban homes and some 65 million people in slums, slums have become India’s default housing policy; the alternative must be legislated.

Three, the water emergency. With 600 million Indians in high-to-extreme water stress, water — not land — is the constraint that will decide which cities have a future at all.

Four, the sanitation gap. Barely a quarter of urban sewage is treated before it re-enters the country's rivers and aquifers; every untreated litre is a public-health bill deferred downstream.

Five, solid waste. Cities generate, conservatively, over 1.7 lakh tonnes of waste a day atop a legacy of mountainous dumpsites; the fix exists, as Swachh Bharat's gains show, where governance does.

Six, mobility. India has built the world's third-largest metro network and still chokes, because it has yet to master how to move people and goods sustainably through its cities and towns — and no dense city is ever un-jammed by making more room for cars, only by moving people and freight efficiently.

Seven, urban flooding and heat. From Mumbai to Chennai to Bengaluru, paved-over lakes and unbuilt drains turn every monsoon into a disaster, even as urban heat rises fastest of all — climate resilience must become a building code, not a brochure.

Eight, the hollow municipal treasury. With municipal revenues frozen near 1% of GDP for a decade, a city that cannot raise its own money cannot govern its own future; it can only wait for a grant.

Nine, the infrastructure financing gap. The World Bank estimates India must invest some US$ 840 billion in urban infrastructure over 15 years, against a fraction of that today — capital that must be front-loaded before the population arrives, not after the slum does.

Ten, the missing city government. Three decades after the 74th Amendment promised empowered urban local bodies, functions, funds, and functionaries remain undevolved, mayors remain ceremonial, and metropolitan planning committees remain unconstituted. Every other fracture is, in the end, a symptom of this one.

What The Policy Must Contain

The elements of a credible National Urbanisation Policy follow directly from those challenges. 

It must redefine and differentiate — counting functional urban India honestly, and treating a megacity, a booming Tier-II town and a census town as the distinct animals they are. It must devolve in full — real funds, functions and functionaries to elected city governments, completing the unfinished business of 1992. It must govern at the right scale — empowered metropolitan authorities for airsheds, watersheds, and transport systems that ignore municipal lines. 

It must make cities bankable — through property-tax reform, user charges, and land-value capture — so cities can borrow against their own worth. And it must be built with sustainability as its spine, because India is urbanising into the teeth of a climate emergency the West never faced while it built. 

Crucially, the policy must be statutory, not advisory — a national framework law under which states legislate, as they do for education and the environment — and it must carry a financing compact that ties Union and state money to measurable urban outcomes. What gets a legal mandate and a funded target gets built; what gets a glossy report gets shelved, as 1975 proved.

The Structural Fixes

First, an empowered, directly elected mayoralty with a fixed term and a professional municipal cadre. 

Second, fiscal federalism for the third tier: a constitutionally anchored, formula-based flow of resources to cities through State Finance Commissions. 

Third, the retirement of the parastatal state — the development authorities and boards that today run the city around its elected council must be brought under it. 

Fourth, serviced land at scale, released through transparent statutory planning rather than the black market of unauthorised colonies and post-facto regularisation. 

And fifth, a next-practices leapfrog — not the West's car-centric sprawl nor a demolition-led model, but a dense, transit-served, digitally governed, climate-resilient Indian urbanism.

(The writer is a former civil servant. Views are personal.)