The Next Generation of Cities: Innovation Through Digital Infrastructure

India stands at one of the most consequential inflection points in the history of urbanisation. By 2036, our towns and cities will be home to 600 million people, 40 per cent of the population, and urban India will contribute nearly 70 per cent of national GDP. Look further ahead and the numbers become even more compelling. The World Bank’s 2025 report, Towards Resilient and Prosperous Cities in India, projects our urban population will nearly double to 951 million by 2050, requiring investments of over USD 2.4 trillion in resilient, low-carbon infrastructure. Here lies the extraordinary part: more than half the urban infrastructure India will need by mid-century is yet to be built. We are not retrofitting the past; we are designing the future on a largely open canvas.

What gives me confidence is that India has already shown the world how digital rails can transform the delivery of public value. The Unified Payments Interface, recognised by the IMF in 2025 as the world’s largest real-time payment system, processed over 24,000 crore transactions worth approximately Rs 314 lakh crore in FY 2025-26, accounting for nearly half of all real-time payments globally. Aadhaar, DigiLocker, ONDC and the wider India Stack have shown us something important: build open digital systems that anyone can use and connect to, at the scale of the whole population, and innovation takes off faster than any closed system allows. The next generation of Indian cities will be built on precisely this thesis, applied not to payments alone but to water, mobility, land, energy and governance itself.

The foundations are already visible. The Smart Cities Mission, concluding after a decade, has delivered over 8,000 projects worth approximately Rs 1.64 lakh crore across 100 cities, and, most significantly, operational Integrated Command and Control Centres in every one of them. These ICCCs, along with 84,000-plus CCTV cameras and more than 17,000 kilometres of SCADA-monitored water pipelines, constitute something India’s cities have never possessed: a digital nervous system. The opportunity is to graduate these command centres from monitoring platforms into decision-making platforms, where AI-enabled analytics predict water losses before they occur, optimise traffic in real time, and give municipal commissioners the operational intelligence a modern corporation takes for granted.

Three frontiers, in my view, will define this next generation. The first is the digital twin, a living, data-rich replica of the city that lets planners simulate the impact of a new metro corridor, a flood event or a redevelopment scheme before a single rupee of concrete is poured. The National Geospatial Mission announced in the Union Budget 2025-26, riding on PM Gati Shakti, is quietly laying this foundation by modernising land records and geospatial data. The second is data as a municipal asset. Our Economic Survey 2025-26 observed, using satellite-based settlement data, that India is functionally far more urban than official definitions capture, a reminder that better data does not merely describe our cities; it redefines how we govern and invest in them. The third frontier is the marriage of digital infrastructure with municipal finance. The Rs 1 lakh crore Urban Challenge Fund, approved by the Cabinet in 2026, finances 25 per cent of project costs provided at least half is raised from municipal bonds, bank loans and PPPs, expected to catalyse Rs 4 lakh crore of urban investment. Market capital follows credible data. Cities with digitised property registers, GIS-mapped assets and transparent accounting will find investors queuing; digital infrastructure is quite literally becoming the balance sheet of the Indian city.

The most exciting chapter will be written in our Tier-II and Tier-III cities. Unburdened by legacy systems, they can leapfrog directly to integrated digital platforms, much as India leapfrogged landlines for mobile telephony and cards for UPI. A mid-sized city that digitises its water network, its building permissions and its citizen grievance systems today positions itself to attract industry, talent and investment tomorrow. For technology firms, financial institutions and advisory professionals alike, this is perhaps the largest greenfield opportunity of our generation. Cities have always been humanity’s greatest invention for creating prosperity. India’s distinct contribution will be to show that a nation of a billion-plus people can urbanise digitally, inclusively and sustainably, that a citizen in Muzaffarpur or Solapur can access services as seamlessly as one in Mumbai. As we walk the road to Viksit Bharat 2047, the next generation of Indian cities will not merely adopt technology. They will be built upon it. The canvas is open, the rails are laid, and the opportunity is ours to grab.