National Urbanisation Policy (NUP): Reforming India’s Urban Governance

Subject: GS 2: Polity & Governance

Context: Recently, a report prepared by World Resources Institute (WRI) India at the request of the Economic Advisory Council to the Prime Minister (EAC-PM) proposed a National Urbanisation Policy (NUP) to provide an integrated framework for India’s rapidly changing urban landscape.

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• The report proposes a National Urbanisation Council, State Urbanisation Councils and City-Region Planning Authorities to improve coordination across different levels of government.
• It seeks to address the mismatch between administrative boundaries and actual patterns of urban growth, particularly the expansion of small towns, Census Towns and peri-urban areas.

About the National Urbanisation Policy (NUP)

The NUP is proposed as an integrated national framework to guide India’s rapidly expanding and spatially transforming urbanisation. It seeks to move beyond isolated city-level planning towards coordinated planning across cities, small towns, Census Towns and peri-urban regions.

• Purpose: Provide a common framework for economic development, spatial planning, infrastructure, environmental sustainability, climate resilience and social inclusion.
• Planning Approach: Shift towards city-region and regional planning, recognising that urban growth increasingly extends beyond municipal boundaries.
• Governance: Improve coordination among Union, State and local governments through proposed National and State Urbanisation Councils.
• Planning Reform: Promote statutory regional plans, standardised urban classification and municipalisation criteria, and stronger City-Region Planning Authorities.
• Municipal Capacity: Strengthen Urban Local Bodies through effective devolution of Functions, Funds and Functionaries.
• Data-Based Planning: Develop a national urban data ecosystem covering peri-urbanisation, migration, land use, infrastructure and climate risks.

Why Does India Need a National Urbanisation Policy?

• Fragmented Governance: Urban development involves multiple Union ministries, State departments and local bodies, often working through separate schemes and planning frameworks.
• Urbanisation Beyond Municipalities: Urban growth increasingly extends into Census Towns and peri-urban settlements that may still be governed as rural areas.
• Sectoral Disconnect: Housing, transport, employment, industry, water, sanitation and environmental planning are often undertaken separately despite their strong interdependence.
• Changing Urban Geography: The emerging rural-urban continuum requires planning beyond the traditional city-versus-village framework.
• Climate & Social Challenges: Urban plans often lack adequate integration of climate resilience, migration, housing, gender and social inclusion. 
• Changing Face of India’s Urbanisation: According to the WRI India, using the United Nations-promoted Degree of Urbanisation (DEGURBA) methodology, 61.6% of India’s population is classified as urban, while another 26.66% lives in peri-urban areas, highlighting the scale of urbanisation beyond formal municipal boundaries.

Major Urban Challenges and Policy Responses

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Key Recommendations

• National Urbanisation Council: A national-level body led by the Prime Minister or a designated senior Cabinet Minister to establish priorities, facilitate inter-ministerial coordination and align public programmes with urbanisation objectives.
• State Urbanisation Councils: Chief Minister-led platforms bringing together departments responsible for urban development, town planning, finance, transport, housing, industry, environment and rural development.
• City-Region Planning Authorities: Existing metropolitan and regional planning institutions should receive clear legal mandates, professional capacity, dedicated secretariats and sustainable revenue sources.
• Regional Planning: Statutory regional plans should coordinate land use, housing, transport, infrastructure and environmental management across administrative boundaries.
• Municipalisation: Establish transparent criteria for transitioning rapidly urbanising settlements from rural to appropriate urban governance structures.

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