India’s cities are not merely places of residence but function as critical economic infrastructure. Density and proximity generate agglomeration economies that raise productivity, deepen labour markets, and enable innovation. The economic role of cities is therefore central to India’s growth trajectory, said the Economic Survey 2025-26. The survey underlined that India is already deeply urban in economic terms, with the majority of its national output generated in cities and in urban areas. The task now is to make that urbanisation work better for citizens in tangible and intangible ways.

The survey positioned cities as economic assets that require deliberate investment and strategic planning. It stated that recognisation of cities as economic infrastructure is a necessary first step toward aligning public policy, fiscal priorities, and planning frameworks with India’s development trajectory. According to Economic Survey 2025-26, India is far more urban in economic and functional terms than official definitions suggest. Based on satellite data from the Global Human Settlements Layer (GHSL) of the Group on Earth Observations at the European Commission, India was 63 per cent urban in 2015, which is nearly double the urbanisation rate reported in the 2011 Census.