Opinion America is closing. India needs better cities to attract the best talent

As of now, just 15 Indian cities contribute 30 per cent of India’s GDP. Their ability to drive an extra 1.5 per cent of growth will determine India’s ambition to become a $30 trillion-plus economy by 2047. Yet, they are hobbled by air pollution, water scarcity, urban flooding, garbage mountains, and poor governance. They are not world-class. With the right intervention, they can be.

With India home to approximately 42 of the 50 most polluted cities, vehicular emissions must be curtailed immediately. This requires the rapid electrification of public transportation and the strict implementation of construction dust norms. We must utilise mechanisms like the proposed Rs 1 lakh crore Urban Challenge Fund, ranking cities based on performance and disbursing financial incentives accordingly.

The failure of municipal governance is evident in the fact that only a quarter of the upwards of 1,50,000 tonnes of solid waste generated daily is processed scientifically. State governments must invest in infrastructure and trained staff for waste collection and transportation. Clear policies promoting performance-based accountability and ensuring that communities segregate waste are essential.

Addressing acute water shortage, which threatens 30 Indian cities, is critical. Cities must adopt strategies to collect, treat, and reuse used water on a vast scale. We must also tackle the inefficiency that sees 40-50 per cent of piped water lost in transmission. A rational and pragmatic policy for pricing water must be introduced, based on a “pay as you use” model that includes subsidies for the needy and rising rates as a disincentive for over-consumption.

We must discard the “failed fallacy” of restricting the Floor Space Index (FSI) to artificially low levels, which drives urban sprawl and increases commuting distances. Indian planners must shift away from creating urban sprawls by allowing higher FSI and changing archaic regulations that limit optimal land usage. Singapore has demonstrated that planned, dense vertical development can co-exist with high livability and biodiversity.

The shortfall of affordable homes, projected to triple to 31 million by 2030, must be addressed. Increasing FSI/FAR growth promotes vertical development, and cities should explore density-related incentives, following models from Sao Paolo and Tokyo, where developers gain height allowances in exchange for contributions to social housing or transit infrastructure.

To tackle congestion, which costs the average city dweller up to two hours daily, we must invest heavily in public transport, complementing metro systems with electrified last-mile solutions. Implementing Transit Oriented Development (TOD) is key, focusing planning around rapid transit networks to foster compact, vertical growth, reduce car usage, and enhance productivity through agglomeration.

India currently lacks sufficient urban planning capacity, with Niti Aayog reporting fewer than one planner per city. States must strengthen urban governance structures, build a cadre of professional urban managers, and grant greater administrative and financial freedom to cities. We must also dramatically increase property tax collection, digitise land records, and explore Land Value Capture (LVC) to fund municipal growth, a proven model in Hong Kong.

Indian cities must scale up the success demonstrated by Indore, particularly in resource management. This city has proven that efficient, scientific waste management is achievable through door-to-door segregated waste collection and world-class processing plants that convert wet waste into bio-CNG. Similarly, Indore’s designation as India’s first “water-plus” city, achieved by plugging sewage leakages using GIS technology and rigorously implementing rainwater harvesting and treated water reuse, offers a clear, replicable path to water resilience across India.

Sustainable urbanisation will define India’s prosperity. India already operates the world’s second-largest urban system, exceeding the combined urban populations of the US, UK, Germany, and Japan. In the last decade alone, we have added 91 million people (a 32 per cent increase) to our urban population. By 2030, approximately 350 million people will move to cities with urban growth contributing 73 per cent of the total population increase by 2036. Urbanisation will be the biggest agent of growth.

Historically, successful urbanisation across countries has been key to lifting vast segments of the population above the poverty line. Without strategically transforming our cities into world-class entities, India cannot fulfil this economic ambition. India can no longer afford to be a “reluctant urbaniser”.

People don’t leave India for just a high-paying job; they leave for a better quality of life. America is opening a door for India by closing its own. We have the chance to bring our brightest minds home or ensure we never lose them, but to do that, we need to give them a reason to stay.

The writer was India’s G20 Sherpa and former CEO, Niti Aayog. Views are personal