Abstract

India’s ongoing urban transition is the largest in the world, both in scale and complexity. Yet, the institutional and fiscal frameworks that shape this transition have lagged. Current definitions continue to underestimate the extent of urbanisation, while governance and funding arrangements struggle to keep pace with the changing spatial and demographic reality. The impact is starkest in small towns, Census Towns (CTs), and other transitioning settlements, areas where nearly 10 crore Indians presently live. The Sixteenth Finance Commission (FC-XVI) has the opportunity to recalibrate intergovernmental fiscal arrangements to support the country’s urban transition and its urban future.