NITI Aayog urges stronger city governments as India’s urban population is projected to reach 850 million

NITI Aayog member Rajiv Gauba used the closing session of India’s second National Urban Conclave to call for stronger city governments, changes to municipal finance and a new approach to urban planning. The government release, published on 25 October, places the proposals against a long-term demographic shift: it says nearly half of India’s population is expected to live in urban areas by 2050.

Gauba cited an urban population of about 500 million at present, projected to rise to 850 million by 2050. The release separately says India’s total population may stabilise at approximately 1.65 billion around 2060. These are projections presented in his address, not new census results. The scale of expected urban growth, he argued, requires cities to expand infrastructure, housing and basic services while improving how local decisions are made.

The speech pointed to gaps between municipal responsibilities and authority. Gauba called for states to devolve all 18 functions listed for urban local bodies under the 74th Constitutional Amendment, including master planning, water supply, fire services and traffic management. He also advocated directly elected mayors with five-year terms, a mayor-in-council model and timely municipal elections, arguing that decisions affecting cities cannot be managed effectively from state capitals.

Financing was another focus. Gauba said municipal revenues remain low and urged better collection of property taxes and user charges, alongside regular state finance commissions and adequate transfers to local governments. The release cited a tenfold increase in the budgetary outlay for the urban sector and about ₹3.7 trillion in investments in metro rail and bus systems, but did not specify a comparison period for the outlay figure.

For investment and land use, he cited the Urban Challenge Fund of ₹1 trillion announced in the 2025–26 budget and this year’s allocation of ₹50 billion each for seven city economic regions over five years. He also called for mixed-use zoning, development around transit hubs, land pooling and more affordable rental housing. The address sets out policy recommendations and projections; it does not announce that the proposed municipal reforms have been enacted.