The Future of Indian Cities

I grew up in Junagarh, a town in Kalahandi district that does not register on most maps of Indian cities. The people I grew up with who wanted more options left, to Bhubaneswar, to Hyderabad, to Pune, to Bangalore. I watched them leave. I watched what happened when they arrived.

Some of them found what they came looking for. Others found the city was not ready for them in the ways they needed it to be. The apartment they could afford was three hours from the office by the infrastructure the city had built. The school they wanted for their children was not in the neighborhood where the rent was manageable. The opportunity they had moved for existed, but the city's dysfunction extracted a toll that consumed much of what they gained.

I am now building businesses from Odisha. The question of what Indian cities become - not just the metros but Bhubaneswar, the eastern cities, the secondary cities - is the question I live inside.

Every day, approximately 30,000 people move to Indian cities, one of the largest sustained urbanization flows in human history. They arrive looking for the same things people have always moved to cities for: economic opportunity, access to services, escape from the constraints of wherever they came from. They join a mass urbanization that is one of the largest demographic transitions in human history.

And the cities they are moving into are not ready for them.

The infrastructure deficit

Indian cities are running infrastructure deficits in almost every category. Housing supply has not kept pace with population growth, producing a combination of extreme price appreciation in formal markets and informal settlements that house enormous populations in inadequate conditions. Water infrastructure is strained; multiple major Indian cities have operated on a few hours of supply per day as population has outpaced network capacity. Transportation infrastructure in most cities is organized around private vehicles in a context where most people cannot afford them and road networks cannot accommodate the vehicles of those who can.

Bengaluru, home to much of India's technology industry, has some of the worst traffic congestion in Asia by measured commute time. Pune, one of the fastest-growing cities in India, experienced catastrophic flooding in 2019 and again in recent years as urbanization outpaced its drainage capacity. Chennai experienced a severe water crisis in 2019 when its four reservoirs ran nearly dry, forcing the city to truck in water from hundreds of kilometres away. These are not minor failures. These are cities that were unable to provide basic infrastructure to their residents for extended periods.

This is not a secret. The infrastructure deficit has been documented, analyzed, and discussed in policy contexts for decades. The pattern repeats because infrastructure is consistently undervalued until it fails. What is less often discussed is why the deficit has proven so persistent despite sustained attention.

Part of the answer is governance. Most Indian cities are governed by municipal institutions with limited financial resources, limited technical capacity, and - in the constitutional structure India created - limited independent authority. Urban governance is formally within state jurisdiction, a version of the broader state capacity problem, which creates coordination layers that slow decision-making and diffuse accountability. The city government that residents can most directly hold accountable has the least actual power over the decisions that shape urban life.

Part of the answer is planning. The masterplan approach that has dominated Indian urban planning produces documents that describe ideal futures and have limited connection to the actual dynamics that shape urban growth. Informal development is not an aberration from the plan - it is often the dominant mode of how the city actually expands - and a planning framework that treats informality as a problem to be eliminated rather than a process to be guided has not been effective.

The person who moved from Junagarh to Bangalore for opportunity is not failing the city. The city is failing them. A three-hour daily commute is not a personal inconvenience. It is a policy outcome.

Part of the answer is investment sequencing. Indian cities have chronically under-invested in trunk infrastructure and then spent decades catching up, rather than building ahead of population growth. The metro that arrives after the automobile dependency is entrenched is far less useful than the metro that shapes how the city grows. The water network that is expanded after the informal settlements it needs to serve have already been built at incompatible densities is far more expensive to serve than one that preceded them.

What the next decade demands

What better looks like is not complicated in concept, even if it is difficult in execution. It means compact, mixed-use development patterns that support public transit rather than requiring private vehicles. It means investing in trunk infrastructure ahead of need rather than perpetually catching up. It means governance structures that have both the authority and the accountability to make decisions at urban scale. It means planning that integrates informal development rather than denying it.

The most interesting urban development in India right now is happening in places that have made some version of this shift. States that have invested in metro rail systems before the automobile lock-in became irreversible. Cities that have undertaken serious affordable housing programs rather than treating housing as a private market problem. Local governments that have found ways to generate revenue and invest it in infrastructure rather than depending entirely on state transfers.

Bhubaneswar, where I work, is a useful example. It is not a large city by Indian standards, but it made deliberate decisions about where its technology industry would locate, investing in a planned tech corridor in Infocity rather than allowing dispersed development. The result is a city where the commute from a tech professional's apartment to their office is manageable in ways that Bengaluru or Hyderabad's are not. This is not an accident. It is the outcome of decisions about density, zoning, and infrastructure sequencing made by the state government in the 1990s and early 2000s, before the industry arrived.

The lesson is not that Bhubaneswar has solved urban development. It has not. Its water distribution, its public transport, and its affordable housing for lower-income residents all have significant gaps. The lesson is that the early decisions mattered - and that there is a window to make them that closes as population grows and spatial patterns become harder to change.

The economic argument

There is an economic argument for investing in Indian cities that should matter to anyone who cares about Indian development at the macro level.

Cities are where productivity happens at scale. The density of people, firms, ideas, and institutions in cities produces agglomeration effects - the compounding gains in innovation and productivity that make urban economies systematically more productive than rural ones. India's ability to sustain high growth rates over the next two decades depends heavily on whether its cities function well enough to capture these gains.

Poorly functioning cities do not just fail to capture agglomeration gains; they actively destroy potential. A worker spending three hours a day commuting because the city's transportation system cannot move people efficiently is a worker whose productivity the city is wasting. A firm that cannot find skilled labor because housing costs have pushed workers to the urban periphery is a firm whose potential is being constrained by urban dysfunction. An executive search I completed in 2023 stalled for two months because the candidate - a VP-level hire - could not find housing she could accept within an hour of the company's office without paying more than the role's compensation justified. The company lost two months of productivity. The candidate nearly withdrew. The city's housing dysfunction showed up directly in the cost of filling a senior role.

Cities are where productivity happens at scale. India's ability to sustain high growth rates over the next two decades depends heavily on whether its cities function well enough to capture agglomeration gains - and right now, many of them are not.

The investment case for Indian cities is not charity or social justice, though those arguments are also valid. It is economic. Better cities mean a more productive economy. The cost of not building them right will compound for decades.

The people who are waiting

The 30,000 who arrive in Indian cities each day are not statistics. They are people making calculated bets: that the opportunity on the other side of this move is worth the disruption, the uncertainty, and whatever the city puts in their way.

Most of them are right. Most of them find something better than what they left. But many of them find that the city extracts a tax - in commuting time, in housing insecurity, in the cost of navigating inadequate systems - that consumes a larger share of what they came for than it should. The gap between the opportunity that drew them and the life the city actually provides is the gap that urban infrastructure either closes or widens.

The cities being built now will persist for generations. The infrastructure being installed, the neighborhoods being formed, the spatial patterns being established - these are decisions with fifty-year consequences. The window to get them right is not open indefinitely.

Manas Majhi grew up in Junagarh, Kalahandi, Odisha. He writes about opportunity, development, and the systems that fail to distribute either equitably. He is the founder of Majhi Group and Majhi OS.

See also: Tier 2 and Tier 3 Cities in India, Why Infrastructure Matters More Than Headlines, Building for a Billion People, Why India's Moment Is Now

Sources

World Bank India: urbanization and development data

India's urban population projections: UN World Urbanization Prospects

Smart Cities Mission: Ministry of Housing and Urban Affairs

TomTom Traffic Index: Global City Congestion Rankings

NITI Aayog: Urban Planning Capacity in India (2021)