Economic Survey calls for 20-year city plans for all million-plus cities

MUMBAI: Every Indian city with a population of above a million should be required to prepare a 20-year City Spatial and Economic Plan that will be updated every five years, proposed the Economic Survey for 2025-26.

The plan needs to be prepared with three non-negotiable elements including a transport network plan, a housing supply plan with annual unit targets, and a land-value capture framework linked to infrastructure corridors.


The proposal forms part of a broader argument in the survey that India is already far more urban in economic and functional terms than official definitions suggest, and that future policy must focus on improving system performance across cities rather than isolated projects.

“India’s cities are not merely places of residence but function as critical economic infrastructure. Density and proximity generate agglomeration economies that raise productivity, deepen labour markets, and enable innovation. The economic role of cities is therefore central to India’s growth trajectory,” the survey said, adding that the economic role of cities is central to India’s growth trajectory.

It has underlined that the majority national output is already generated in urban and urbanising areas. It positioned cities as economic assets requiring deliberate investment, coordinated planning and predictable governance frameworks to ensure that urbanisation delivers tangible improvements in quality of life.

Citing satellite-based estimates from the Global Human Settlements Layer of the European Commission, the Survey noted that India was 63% urban in 2015, nearly double the urbanisation rate recorded in the 2011 Census.

It also referred to World Bank estimates projecting that by 2036, India’s towns and cities will house 600 million people, or 40% of the population, contributing nearly 70% of GDP.


On mobility, the Survey highlighted the expansion of mass rapid transit over the past decade, with around 1,036 km of Metro and RRTS networks operational across about 24 cities as of 2025, alongside additional corridors under construction.

The survey also pointed to the rollout of the PM e-Bus Sewa scheme, under which 7,293 e-buses have been approved across 14 States and four Union Territories during 2025–26, supported by Rs 20,000 crore of central assistance and a Payment Security Mechanism.

It also noted significant progress under the Smart Cities Mission, with over 90% of the roughly 8,067 projects completed as of May 2025 and nearly Rs 1.64 lakh crore invested. These include smart roads, command and control centres, upgraded water and sewerage networks, and public spaces.

On housing, the survey said that 122.06 lakh homes have been sanctioned under PMAY–Urban, with 96.02 lakh completed or delivered as of November 2025.

Looking ahead, the survey stressed the need for stronger planning, governance and financing mechanisms. It pointed to the Urban Infrastructure Development Fund, launched with an initial outlay of Rs 10,000 crore, to support infrastructure in Tier-2 and Tier-3 cities.

Future urban policy must integrate housing, mobility, sanitation, climate resilience and finance to build cities that are economically dynamic, socially inclusive, environmentally sustainable and institutionally capable, the survey added.