Make cities more economically dynamic, socially inclusive, environmentally sustainable: Survey
New Delhi: The promise of building India’s urban future lies in making our cities economically dynamic, socially inclusive, environmentally sustainable, and institutionally capable, the Economic Survey 2025-26 said on Thursday.
According to the Survey, tabled in the Parliament by Finance Minister Nirmala Sitharaman, 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.
“India is far more urban in economic and functional terms than official definitions suggest,” it noted.
Based on satellite data from the Global Human Settlements Layer (GHSL) of the Group on Earth Observations at the European Commission, India was 63 per cent urban in 2015, which is nearly double the urbanisation rate reported in the 2011 Census.
According to the Survey, 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 Economic Survey said.
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 suggested.
The survey positioned cities as economic assets that require deliberate investment and strategic planning.
The World Bank recently 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.
It further 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.
Towards this goal, the country has “materially expanded mass rapid transit system over the last decade”.
The Survey also suggested augmentation and digitisation of bus fleets, finance-first e-bus deployment, mainstreaming last-mile and shared mobility, operationalisation of Transit-oriented Development (TOD), and value capture around stations.
Around 1,036 km of Metro/RRTS are operational across around 24 cities, with further corridors under construction, as of 2025.
The government launched PM e-Bus Sewa to strengthen city bus operations with 10,000 e-buses on a Public-Private Partnership (PPP) model.
It was backed by Rs 20,000 crore central assistance and a Payment Security Mechanism (PSM) to assure operator cashflows.
According to the survey, during FY25, 7,293 e-buses have been approved across 14 States and 4 UTs, Rs 983.75 crore has been sanctioned for depot and behind-the-meter power infrastructure, and Rs 437.5 crore has already been disbursed.
Meanwhile, the Swachh Bharat Mission-Urban (SBM–U) has been complemented by investments under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and AMRUT 2.0. Door-to-door collection of municipal solid waste (MSW) has expanded to 98 per cent of urban wards by 2025–26.
