The Union government has dropped its Rs.80 billion plan to develop eight greenfield cities, originally recommended by the 15th Finance Commission, opting instead to invest in upgrading existing urban areas.

The decision, reportedly made by the Prime Minister’s Office after consultations with NITI Aayog and the Asian Development Bank, marks a shift toward revitalising smaller cities— especially those with populations under 100,000— under a forthcoming Rs.1000 billion “urban challenge” scheme.

Proposals for new cities like Ayodhya, Jagiroad, and Jabalpur Extension will now be reconsidered as extensions of existing cities under the Special Assistance to States for Capital Investment (SASCI) programme.

The move reflects a strategic preference for brownfield development and transit-oriented planning over building new cities from scratch, aligning with global urban development trends. Experts emphasise the need for state-level reforms, particularly in town planning laws.