Cities Face USD 2.4 tn Gap For Climate Resilience By 2050
ECONOMY & POLICY

Cities Face USD 2.4 tn Gap For Climate Resilience By 2050

A joint report by the Federation of Indian Chambers of Commerce and Industry and Ernst & Young found that United States dollar (USD) 2.4 tn will be required by 2050 to make India's cities climate resilient and low carbon. Municipal corporations have mobilised only a fraction of the capital to date, with 20 municipal corporations accessing capital markets and collectively raising about USD 476 mn. Urban areas currently contribute more than 60 per cent of national gross domestic product while housing nearly one third of the population. Municipal corporations collectively generate revenues equivalent to only about 0.6 per cent of GDP, which constrains their capacity to fund infrastructure and services.

The report estimated that India will require around USD 840 bn in urban infrastructure investments over the next 15 years, translating into nearly USD 55 bn annually, and noted that nearly 70 per cent of the urban infrastructure required by 2047 has yet to be built. India's urban population is projected to rise to nearly 600 million by 2036 and to reach 877 million by 2050, increasing the share of economic output attributed to cities. The authors identified financing, rather than infrastructure creation alone, as the primary obstacle to the government's Viksit Bharat 2047 objectives and stressed the need to mobilise long term capital.

The report set out six strategic shifts focused on economic leadership, a network of growth cities, investment ready municipal entities, economic competitiveness, data as strategic intelligence and climate resilience. The chair of the FICCI committee on urban development urged a move towards economically competitive, investment ready cities supported by strong governance and integrated planning. The authors described the Union government's Rs 1 tn Urban Challenge Fund as an important measure to strengthen municipal finances and said the fund, which requires urban local bodies to mobilise 50 per cent of project costs from capital markets, is expected to catalyse nearly Rs 4 tn in investments.

The analysis highlighted uneven distribution of economic activity, with the top 10 cities contributing nearly 30 per cent of GDP while many Tier II and Tier III cities remain underutilised. It recommended a polycentric growth model linked by economic corridors to unlock emerging city potential. The report noted progress under flagship programmes, citing more than 8,000 projects worth over Rs 1.64 tn under the Smart Cities Mission, Rs 2.7 tn committed under AMRUT across nearly 500 cities and 12.5 mn houses sanctioned under Pradhan Mantri Awas Yojana Urban.

A joint report by the Federation of Indian Chambers of Commerce and Industry and Ernst & Young found that United States dollar (USD) 2.4 tn will be required by 2050 to make India's cities climate resilient and low carbon. Municipal corporations have mobilised only a fraction of the capital to date, with 20 municipal corporations accessing capital markets and collectively raising about USD 476 mn. Urban areas currently contribute more than 60 per cent of national gross domestic product while housing nearly one third of the population. Municipal corporations collectively generate revenues equivalent to only about 0.6 per cent of GDP, which constrains their capacity to fund infrastructure and services. The report estimated that India will require around USD 840 bn in urban infrastructure investments over the next 15 years, translating into nearly USD 55 bn annually, and noted that nearly 70 per cent of the urban infrastructure required by 2047 has yet to be built. India's urban population is projected to rise to nearly 600 million by 2036 and to reach 877 million by 2050, increasing the share of economic output attributed to cities. The authors identified financing, rather than infrastructure creation alone, as the primary obstacle to the government's Viksit Bharat 2047 objectives and stressed the need to mobilise long term capital. The report set out six strategic shifts focused on economic leadership, a network of growth cities, investment ready municipal entities, economic competitiveness, data as strategic intelligence and climate resilience. The chair of the FICCI committee on urban development urged a move towards economically competitive, investment ready cities supported by strong governance and integrated planning. The authors described the Union government's Rs 1 tn Urban Challenge Fund as an important measure to strengthen municipal finances and said the fund, which requires urban local bodies to mobilise 50 per cent of project costs from capital markets, is expected to catalyse nearly Rs 4 tn in investments. The analysis highlighted uneven distribution of economic activity, with the top 10 cities contributing nearly 30 per cent of GDP while many Tier II and Tier III cities remain underutilised. It recommended a polycentric growth model linked by economic corridors to unlock emerging city potential. The report noted progress under flagship programmes, citing more than 8,000 projects worth over Rs 1.64 tn under the Smart Cities Mission, Rs 2.7 tn committed under AMRUT across nearly 500 cities and 12.5 mn houses sanctioned under Pradhan Mantri Awas Yojana Urban.

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