Abstract

This study analyses recent urban development budgets across seven Indian States —Haryana, Karnataka, Kerala, Madhya Pradesh, Odisha, Punjab and Telangana—to understand how State governments are responding to the demands of India’s rapid urban transition. The analysis drawing on budget data for 2023-24 to 2025-26, the analysis reveals a renewed emphasis on urban sectors in state budgets, reflected in rising allocations, expanded state-led schemes, and increasing fiscal transfers to urban local bodies. While centrally sponsored schemes continue to anchor several state priorities, particularly in infrastructure and basic services, states are also directing substantial resources through their own programmes to respond to varied local needs. Distinct approaches emerge across states—from Kerala’s diversified schemes and Karnataka’s mission-based consolidation to Odisha and Madhya Pradesh’s expanded state investment and Telangana’s large-scale transfers to urban bodies. These differences underscore the diverse channels through which local priorities shape state budgetary choices. Together, the findings highlight the growing importance of state governments in steering India’s urban transformation and offer insights for designing context-sensitive policy and institutional support for urban development.