Reimagining Indian cities: Economic development imperative
This article is authored by Ashish Garg, managing director & senior partner and Yashi Tandon, manager, BCG.
Indian cities contribute a remarkable 60% to the nation’s Gross Domestic Product (GDP). They will power India’s growth. But sadly, they are falling apart. Pollution, basic amenities like water, traffic, open and green spaces and a cohesive social structure are all missing. On the Global Livability Index, New Delhi ranks 142, with Mumbai and Bengaluru close behind at 144 and 145, respectively. If we don’t address these, our economy will suffer. Recognising this, the Union Budget 2025-26 has identified urban development as one of its six key focus areas for the next five years. Further, an Urban Challenge Fund of ₹1 lakh crore has been created for creative regeneration of cities and positioning them as growth hubs. Four simple but hard to implement actions are overdue.

· Integrated urban and economic planning and execution: Effective, large-scale urban and economic planning, paired with efficient execution, is vital to improving Indian cities. Too often, infrastructure projects are conceived in silos, neglecting broader geographical needs. A better approach involves integrated planning that extends beyond city boundaries. For instance, the Delhi Metro serves not only Delhi but also key hubs around Delhi. Similarly, the regional rapid rail system connecting satellite cities like Meerut exemplifies forward-thinking planning for city agglomerations. This should become the new norm. However, slow project implementation often renders infrastructure outdated by the time it is completed. Gurugram’s rapid growth illustrates this issue, where demand has outpaced planning. Some areas housing over 2.5 lakh people, lack basic civic infrastructure, including a master drainage system—a project that has been under implementation since 2011.
To address these challenges, cities must adopt phased planning covering larger geographic and economic regions. Prioritising both small- and large-scale projects, ensuring timely completion, and addressing regional needs comprehensively are essential. Singapore’s Urban Redevelopment Authority (URA) offers a benchmark, showcasing how meticulous urban planning and execution could be done.
· Ecological preservation: Rapid urbanisation and industrial activity have taken a toll on ecological assets within and around cities. Untreated effluents pose a grave threat, with 60–70% of India’s sewage flowing untreated into water bodies. Instances like toxic foam formations in Bengaluru’s Bellandur Lake and Delhi’s Yamuna River underscore the urgency for stricter regulations and immediate action. A zero-tolerance approach is essential to protect these assets.
Designating water bodies and channels, even on privately held land, as national assets—a practice seen in France—can ensure their preservation for public benefit. Urban forests can balance ecology and development, as demonstrated by Gurugram’s Aravali Biodiversity Park, transformed from 157 hectares of degraded quarry into one of India’s most regenerative urban forests. This restoration was driven by community engagement and municipal collaboration. Curitiba, Brazil, serves as another example, with its extensive green spaces doubling as flood management systems, emphasising ecological preservation alongside urban development.
Transparency is key to replicating such successes. Regular drone and satellite monitoring of urban land can help prevent illegal encroachments and ensure accountability.
· Fostering a cultural renaissance: Cities must become cultural hubs while retaining their unique identities. While every city aspires to have modern infrastructure like world-class airports, metros, best hospitals and schools, and commercial zones, we must ensure cities retain their unique identities rather than becoming indistinguishable clones. Cities should also celebrate their heritage and foster community engagement. Public spaces and museums can bring people together, preserve cultural heritage, and spark curiosity.
Some cities have taken steps in this direction. Goa’s iconic events like Sunburn and the International Film Festival, or Bhopal’s Tribal Museum, illustrate how public spaces can foster cultural engagement. Vienna, Austria, stands as a benchmark, consistently ranking as one of the world’s most liveable cities due to its emphasis on cultural preservation, public art, and community spaces. More such initiatives can enhance urban liveability and strengthen community bonds.
· Financial sustainability and citizen ownership: Cities are economic and social entities requiring robust management and ownership. Services such as water and sanitation must be rationally priced. Currently, the largest 10 city corporations contribute over 58% of municipal revenue receipts in India, while user fees for essential services like water supply account for less than 4%. Citizens, too, must develop a deeper appreciation for the infrastructure and amenities they rely on. Cities cannot be treated as disposable platforms; without a sense of ownership, progress will remain inconsistent.
Governments must empower Urban Local Bodies (ULBs) and develop a time-bound strategy to achieve their financial self-sufficiency. Empowering citizens to take ownership of urban spaces is equally crucial. Accessible platforms for residents to interact with authorities, report issues, and volunteer can foster accountability. Initiatives like IChangeMyCity show how communities can drive meaningful change.
India’s urban journey must balance rapid growth with liveability and sustainability. Integrated planning and timely execution, ecological preservation, cultural renaissance, and citizen empowerment are essential to transforming cities into inclusive spaces that align with our aspirations. Initiatives like NITI Aayog’s Growth Hubs extend development plans beyond geographic boundaries, prioritising inclusivity, quality of life, and sustainability alongside economic growth. By embracing these principles, we can create cities that not only drive economic progress but also enrich the lives of their residents, making India a true global destination for talent and innovation.
This article is authored by Ashish Garg, managing director & senior partner and Yashi Tandon, manager, BCG.
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