India’s cities will require an estimated $2.4 trillion of investment by 2050 to become climate-resilient and low-carbon, yet only twenty municipal corporations have ever accessed the capital markets, raising close to $476 million between them, according to Cities as Growth Engines: Powering India’s Next Leap, a report released by FICCI and EY.

The report finds that urban areas generate more than 60 per cent of national GDP from roughly a third of the population, but municipal corporations collectively raise revenues equivalent to about 0.6 per cent of GDP.

The financing task is widening. India’s urban infrastructure requirements are put at approximately US$840 billion over the next fifteen years, or close to US$55 billion annually, and nearly 70 per cent of the urban infrastructure the country will need by 2047 has yet to be built. Urban India is projected to house nearly 600 million people by 2036, contributing almost 70 per cent of GDP, rising to 877 million and 75 per cent of GDP by 2050.

Raj Menda, Chairman of the FICCI Committee on Urban Development and Real Estate and Chairman of the Supervisory Board at RMZ, said, “India’s next phase of urban development must move beyond infrastructure creation to building economically competitive, investment-ready cities. Strong governance, innovative financing and integrated planning will be critical to unlocking the full potential of our cities and accelerating India’s journey towards Viksit Bharat 2047.”

The report frames the Union Cabinet’s ₹1,00,000 crore Urban Challenge Fund, which requires urban local bodies to mobilise half of every project’s cost from the capital markets and is expected to catalyse nearly ₹4 lakh crore of investment, as a signal rather than a scheme — an instruction from the government that Indian cities are to be structured to be financeable.

Six strategic shifts are proposed: from service delivery to economic leadership; from concentrated growth to a network of growth cities; from fiscal dependence to investment-ready cities; from infrastructure creation to economic competitiveness; from data assets to strategic economic intelligence; and from climate vulnerability to climate resilience.

The second of these addresses an unusually concentrated urban economy. India’s top ten cities contribute close to 30 per cent of national GDP, while 36 mid-to-large cities and some 450 smaller centres remain underleveraged despite accommodating a far larger share of the urban population. The report argues for a polycentric system linked by economic corridors and PM Gati Shakti, with Tier-II and Tier-III cities designated as regional growth hubs. The path forward is to reimagine cities as integrated economic platforms, anchored in governance, land, planning, financing, institutional capability and economic positioning.

The prescription rests on a decade of delivery: over 8,000 projects under the Smart Cities Mission at more than ₹1.64 lakh crore, ₹2.7 lakh crore committed through AMRUT across nearly 500 cities, and 1.25 crore houses sanctioned under PMAY-Urban.

Menda added: “The success of Viksit Bharat 2047 will depend on the success of India’s cities.” On the report’s reading, the cities that first build transparent accounts and investment-ready balance sheets will be the ones that compound — and the rest will find that capital, on the terms capital sets, goes elsewhere.