NITI Aayog to redefine urban boundaries using economic data to boost growth and infrastructure

The NITI Aayog is readying a framework for redrawing urban boundaries, with economic parameters and current land use being the key parameters for redefinition.

The move is aimed at helping states better address rapid unplanned urbanisation and focus on targeted infrastructure creation to enable them to unlock their full economic potential, said a senior government official. The government’s premier policy think tank will also outline interventions to boost manufacturing and services and lay emphasis on new growth avenues including tourism, real estate, healthcare and agriculture, according to the official.

Existing Criteria Inadequate

In India, urban areas consist of statutory towns and census towns based on population and engagement of men in non-agriculture activities. However, the existing census definition is about 65 years old and the existing criteria are believed to be inadequate to serve the exigencies of a modern economy.


The Aayog is working on four pilot city-regions — Mumbai Metropolitan Region, Varanasi, Surat and Visakhapatnam – to develop a standardised process template.

“Based on insights and learnings from these pilots, NITI Aayog will shortly launch a framework to guide the formulation of economic plans across other city-regions,” said the official, who did not wish to be identified.

The current definition does not capture the new realities, according to experts.

Vivek Mittal, executive director, Deloitte India, pointed out that as per the existing definition only 31% of the Indian population lived in urban areas in 2011. However, going by the definition followed in France, urban population in India would be 65%, he said.

Adil Zaidi, partner and leader — economic development advisory, EY India, said India’s urban classification, rooted in the census framework of statutory and census towns, often fails to keep pace with the country’s fast-evolving economic geography.

According to the Aayog, India is the world’s second largest urban system, contributing about 63% to the national gross domestic product, as of 2011, and this is expected to increase to 75% by 2040.

The shift in the urban planning paradigm is envisaged to lead to several positive outcomes, including attracting investment and generating employment through a clear, long-term economic vision tailored to each city-region, said the official cited earlier.