Advertisement
What really powers the cloud? Behind every Google search, A...
A lot of what defines a home isn’t visible at handover. I...
Private equity has played a significant role in shaping Indi...
Luxury real estate is one of the most talked-about segments ...
Airports play a much bigger role than just enabling travel -...
Indian cities will require an estimated USD 2.4 trillion in investment by 2050 to become climate-resilient and low-carbon, according to a joint FICCI-EY report released on July 28. The report found that only 20 municipal corporations have accessed capital markets so far, raising around USD 476 million, against an estimated urban infrastructure requirement of USD 840 billion over the next 15 years. With nearly 70% of the infrastructure required by 2047 yet to be built and the urban population projected to reach 877 million by 2050, the report has called for stronger municipal finances, innovative funding and more investment-ready cities.
Indian cities will require an estimated USD 2.4 trillion in investment by 2050 to become climate-resilient and low-carbon, according to a joint report by the Federation of Indian Chambers of Commerce and Industry (FICCI) and EY released on July 28. The report highlighted a significant financing gap, noting that only 20 municipal corporations have accessed capital markets so far and collectively raised around USD 476 million.
The report estimated that India will require around USD 840 billion in urban infrastructure investment over the next 15 years, translating into nearly USD 55 billion annually. It also noted that nearly 70% of the urban infrastructure required by 2047 is yet to be built, placing greater emphasis on the ability of urban local bodies to mobilise long-term capital.
Urban areas currently contribute more than 60% of India's GDP while accommodating nearly one-third of the country's population. However, municipal corporations collectively generate revenues equivalent to only around 0.6% of GDP, limiting their capacity to finance infrastructure and public services.
The scale of the requirement is expected to increase with continued urbanisation. India's urban population is projected to reach nearly 600 million by 2036, when cities are expected to contribute around 70% of GDP. By 2050, the urban population is projected to reach 877 million, with cities accounting for nearly 75% of the country's economic output.
The report identified financing as a key challenge for the next phase of urban development and highlighted the Union government's INR 1 lakh crore Urban Challenge Fund as an important mechanism to strengthen the financial capacity of cities. Under the fund, urban local bodies are required to mobilise 50% of project costs from capital markets. The mechanism is expected to catalyse nearly INR 4 lakh crore in investment.
FICCI Committee on Urban Development and Real Estate chairman Raj Menda said India's next phase of urban development would need to move beyond infrastructure creation towards building economically competitive and investment-ready cities. He identified stronger governance, innovative financing and integrated planning as key requirements for achieving the country's Viksit Bharat 2047 objectives.
The report proposed six strategic shifts for India's urban development framework. These include moving from service delivery towards economic leadership, developing a network of growth cities rather than concentrating activity in a few metropolitan areas, making cities investment-ready, prioritising economic competitiveness alongside infrastructure creation, using data as strategic economic intelligence and building climate-resilient urban centres.
It also highlighted the uneven distribution of economic activity across India's urban system. The country's top 10 cities contribute nearly 30% of GDP, while many tier-II and tier-III cities remain underutilised despite accommodating a substantial share of the urban population. The report recommended a polycentric urban growth model, with emerging cities linked through economic corridors and the PM Gati Shakti initiative.
The report noted that several government programmes have already established a base for urban infrastructure investment. More than 8,000 projects worth over INR 1.64 lakh crore have been taken up under the Smart Cities Mission, while INR 2.7 lakh crore has been committed under AMRUT across nearly 500 cities. In addition, 1.25 crore houses have been sanctioned under the Pradhan Mantri Awas Yojana-Urban.
Menda said the long-term success of Viksit Bharat 2047 would depend on the performance of India's cities, with transparent financial systems, stronger governance and investment-ready balance sheets needed to attract long-term capital.
Source FICCI
Advertisement
Facebook
Whatsapp
