Urbanization beyond Municipal Boundaries

This study identifies three priority areas for India's policymakers as they try to harness economic efficiency and manage spatial equity associated with urbanization. First, to enhance productivity, invest in the institutional and information foundations to enable land and housing markets to function efficiently, while deregulating the intensity of land use in urban areas. This measure would require better coordination between planning for land use and planning for infrastructure, such that densification can be accompanied by infrastructure improvements. An incremental model of experimentation focusing on a few areas-say, around infrastructure corridors and neighborhoods-and then scaling up based on community-level consensus building can help in implementing densification reforms.

Second, to improve livability, rationalize the rules of the game for delivering and expanding infrastructure services, such that providers can recover costs yet reach out to poorer neighborhoods and peripheral areas.

Third, for better mobility, invest in improving connectivity between metropolitan cores and their peripheries, as these are the areas that will attract the bulk of people and businesses over the medium term. Connectivity improvements include investments in network infrastructure and logistics to facilitate movement of goods, while also easing mobility for people.

Land policy, infrastructure services, and connectivity-coordinated improvements in this triad can help India reap dividends from improved spatial equity and greater economic efficiency that comes with urbanization.