India’s latest Economic Survey argues that the country is much more urban than it looks on paper, with cities driving most output, jobs and infrastructure use even though official census definitions still show a largely rural nation.
Tabled in Parliament by Finance Minister Nirmala Sitharaman, the Economic Survey 2025‑26 described cities as “critical economic infrastructure” where density and proximity created productivity gains, deeper labour markets and more innovation.
It noted that India was already “deeply urban in economic terms”, with the bulk of national income generated in urban areas, and stressed that the real task now was to make this urbanisation work better for citizens.
Using satellite imagery from the European Commission’s Global Human Settlements Layer, the economic survey found that India was effectively 63 per cent urban in 2015, nearly double the 31 per cent urbanisation rate recorded in the 2011 Census.
The economic survey also cited World Bank projections that by 2036, about 600 million people—40 per cent of Indians—would live in towns and cities, which are expected to contribute almost 70 per cent of GDP.
Infrastructure, transport reshaping cities
The survey doubled down on how urban life changed on the ground. It pointed to the rapid spread of metro rail and rapid transit systems, with about 1,036km of Metro/RRTS currently operational across roughly 24 cities, and more corridors under construction.
Door‑to‑door collection of municipal solid waste expanded from almost negligible levels a decade ago to 98 per cent of urban wards by 2025‑26, supported by over 2.5 lakh collection vehicles nationwide, under Swachh Bharat Mission‑Urban and AMRUT programmes.
On mobility, the Survey highlighted the PM e‑Bus Sewa scheme, which aims to support 10,000 e‑buses through a PPP model backed by Rs 20,000 crore in central assistance and a payment‑security mechanism.
By FY2025, approvals were given for 7,293 e‑buses across 14 states and four union territories, with nearly Rs 984 crore sanctioned for depots and power infrastructure and about Rs 438 crore already disbursed.
Rethinking urban policy and planning
The Survey argued that future policy must treat cities as economic assets, not just administrative units, and calls for every million‑plus city to prepare a statutory 20‑year spatial and economic plan, updated every five years.
Each plan should include a transport network blueprint, a housing‑supply plan with annual targets, and a land‑value capture framework around major infrastructure corridors.
It urged governments to prioritise “system performance over standalone projects”, integrating housing, transport, sanitation, climate resilience and finance so that cities become more liveable, climate‑ready and economically efficient over the long term.
The survey also stressed how urban policy was already shifting toward inclusion and predictability. How it did was to highlight street‑level schemes such as PM SVANidhi for vendors, PMAY‑Urban, which sanctioned 122.06 lakh houses and completed 96.02 lakh of them.
