India has witnessed rapid urbanization and a sustained economic growth for last few decades. Addition of another 150 million population will increase the urban population share in the country from 33.6% in 2019 to an estimate of 40% by 2030. In terms of numbers, the largest urban transformation of the 21st century is happening in India supported by its ‘demographic dividend’ (one-fifth of the world’s working population). India also aspires to be $5 trillion economy by 2024, of which its urban areas and population is estimated to contribute 85% of the total tax revenue. However, unemployment in urban India is alarmingly high at 7.8%. This is the biggest challenge at its doorsteps, for the country in general and urban India in particular.
It seems that the urban development and economic development in India are ‘two people in two rooms’. Review of the existing central government urban development schemes (including the Smart Cities Mission) finds that it misses on the strategy to place urban India as the fountainhead for economic growth. The current central schemes of MoHUA focus more towards projects that enhance the ease of living of the citizens, but it does not necessarily address their economic prosperity and employment concerns. This strategy paper analyses the relationship between urbanization and economic growth. The paper proposes a city-centric economic growth approach, wherein it emphasizes the need to focus on large firms and big cities, to achieve the immediate economic targets. It further proposes 10 strategies to maximize economic growth and employment opportunities.