Centre Offers Rs 180 Billion for Urban Planning Reforms

17 Jun 2025 CW Team

According to a communication issued by the Ministry of Finance (MoF) on 22 May, funds will be disbursed as per a detailed guideline and on the recommendation of the Ministry of Housing and Urban Affairs. The reforms aim to bring structural improvements through capacity building, digitalisation, and urban land management.

To ensure effective execution, the Centre has grouped 31 states and UTs into three categories, each expected to meet reform milestones in phases. States are encouraged to establish municipal administrative, finance, and technical services, addressing severe human resource gaps. A 2023 study by Janaagraha of 470 city governments revealed an average vacancy rate of 36 per cent in municipal bodies, impacting service delivery.

The Centre’s blueprint urges states to create long-term contractual roles and recruit specialists like environmental engineers and hydrologists, especially critical given growing concerns around urban waste, water quality, and air pollution.

The guidelines also recommend developing a unified property tax portal, integrating it with building permission and revenue registration systems. Every property would be assigned a unique ID, helping improve property tax and stamp duty collections, enhance dues recovery, and provide real-time land-use data to revenue departments.

Only cities covered under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) are eligible to receive this capital assistance. States are also advised to undertake geo-spatial mapping of municipal assets, enabling better land-use planning and resource optimisation.

Further, the Centre has encouraged the adoption of GIS-based utility mapping for water supply, sewerage, and stormwater networks to help cities better manage public health, environmental issues, and climate resilience.

To modernise urban development, states are urged to implement town planning schemes, land pooling mechanisms, transit-oriented development, and promote greenfield cities and green building initiatives. The Centre also advocates the use of digital twin technology, powered by real-time data, to enhance urban master planning, disaster preparedness, and infrastructure development.

Through this reform-driven funding initiative, the government aims to create sustainable, efficient, and digitally empowered cities, aligning with India’s broader development goals.

In a move to accelerate comprehensive urban planning reforms across India, the central government has announced Rs 180 billion in special capital investment assistance for 2025–26. States and Union Territories (UTs) can apply for these funds to implement measures focused on improving governance, urban finance, land use, and the overall ease of doing business.According to a communication issued by the Ministry of Finance (MoF) on 22 May, funds will be disbursed as per a detailed guideline and on the recommendation of the Ministry of Housing and Urban Affairs. The reforms aim to bring structural improvements through capacity building, digitalisation, and urban land management.To ensure effective execution, the Centre has grouped 31 states and UTs into three categories, each expected to meet reform milestones in phases. States are encouraged to establish municipal administrative, finance, and technical services, addressing severe human resource gaps. A 2023 study by Janaagraha of 470 city governments revealed an average vacancy rate of 36 per cent in municipal bodies, impacting service delivery.The Centre’s blueprint urges states to create long-term contractual roles and recruit specialists like environmental engineers and hydrologists, especially critical given growing concerns around urban waste, water quality, and air pollution.The guidelines also recommend developing a unified property tax portal, integrating it with building permission and revenue registration systems. Every property would be assigned a unique ID, helping improve property tax and stamp duty collections, enhance dues recovery, and provide real-time land-use data to revenue departments.Only cities covered under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) are eligible to receive this capital assistance. States are also advised to undertake geo-spatial mapping of municipal assets, enabling better land-use planning and resource optimisation.Further, the Centre has encouraged the adoption of GIS-based utility mapping for water supply, sewerage, and stormwater networks to help cities better manage public health, environmental issues, and climate resilience.To modernise urban development, states are urged to implement town planning schemes, land pooling mechanisms, transit-oriented development, and promote greenfield cities and green building initiatives. The Centre also advocates the use of digital twin technology, powered by real-time data, to enhance urban master planning, disaster preparedness, and infrastructure development.Through this reform-driven funding initiative, the government aims to create sustainable, efficient, and digitally empowered cities, aligning with India’s broader development goals.

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