In recognition of the fact that cities are more crucial than ever as growth hubs, the Union Budget 2023–24 gave careful consideration to India’s orderly urban development. Needless to mention, Indian cities are facing an array of challenges as the population continues to grow and urbanise. It is estimated that by 2050, around 68 per cent of the world’s population will be living in urban areas, the United Nations noted in 2018. In India, the urban population is projected to reach 600 million by 2031, according to the Union Ministry of Housing and Urban Affairs.

With this rapid urbanisation, Indian cities are facing a range of challenges, including housing shortages, inadequate infrastructure and environmental degradation. The government recognised the importance of addressing these challenges and placed a strong emphasis on urban development in the last budget. 

It suggested a range of solutions to deal with these problems. Among them was the formation of a high-level committee composed of economists, institutions, and urban planners to direct the development. The budget also emphasised the need for a paradigm shift in development with a focus on strengthening the capacity-building system in Indian cities. Alongside focusing on megacities, the Union Budget 2023-24 also acknowledged the need to support the development of smaller tier 2 and 3 cities in order to improve the economic potential of the country and reduce the gap between urban centres of different sizes.