India needs economic corridors

AS Tom Peters said, “One size NEVER fits all, it only fits one. Period”. The development of cities in India needs to accept this. Not every city will be a startup hub, not every city will be the GCC hub, not every city will find the metro addressing its need, not every city will be a medicity or an AI Hub and yet most programmes and approaches seem to replicate what may work for one or some.

Nearly 85% of India’s urban population lives in non-metro cities. The recent WUP 2025 data is a warning: “Urban India is growing where we are looking least. To save the Metros, we must fix the Towns.” Yet economic and innovation gravity remains concentrated in just a few large metros. Similarly, Indian cities contribute to 65% of our GDP and India’s share of the global economy is around 9.5%, but no Indian city features in the top 300 cities (Delhi @350). Urban stress is also visible in productivity loss. India’s top metros lose an estimated USD 6–8 billion annually due to congestion related delays, with Bengaluru, Mumbai and Delhi among the most affected. These cities carry a high share of investment and jobs, but they also face rising congestion, environmental stress and clear signs of saturation.

In reality, cities all over the world have long dissociated consumption, demographic size, productivity and infrastructure. In Japan, established industries have been quietly moving their R&D innovation to smaller cities, by design. In the EU, small cities like Esslingen and Munich are leading innovations in Germany. In Sweden, Uppsala is known for being a leading research and development hub, rivalling Stockholm.

As highlighted in the recent report by Primus Partners “Beyond Urban Missions: India Needs a New Generation of Cities”, this imbalance calls for change in our urban development approach. We need to minimise our dependence on metropolitan centres and enable the new emerging cities to play a more strategic role as future anchors of growth.

India’s entire small and medium cities fabric is fundamentally unable to follow this model due to a weak link between urban planning and economic output. Cities are designed around physical layouts and basic services, while their economic potential remains loosely connected to these plans. This disconnect limits their ability to drive long term regional growth.

As proposed in the Primus Partners report, instead of viewing cities as isolated development units, India must begin planning them as part of integrated economic growth corridors. These corridors should link the strengths and offerings of adjoining cities, allowing them to complement each other with multiplier effect for the ecosystem. When connected strategically through mobility, supply chains and labour networks, they can form self-sustaining regional economic systems.

India’s urban development expenditure remains significantly low, requiring at least 3–4 times upliftment compared to leading global economies such as China, the US and Germany. Such holistic regional and economic planning requires a fresh approach to funding. Dedicated regional growth funds could be formed by pooling resources from central schemes, state budgets, multilateral institutions and private investment. These funds should be tagged to quantifiable economic output, such as job creation, enhanced productivity, industrial growth and regional GDP growth.

A substantial opportunity also lies in underutilised land parcels owned by Public Sector Undertakings. These lands may be utilised for public purposes related to industrial clusters, affordable housing, technology parks and mixed use districts. This shall be able to generate both economic value and urban transformation. Another important enabler of successful regional development is an effective framework of land pooling. Land pooling enables fragmented land parcels to be assembled and planned efficiently without large scale acquisition. When supported by well-designed regulations, it serves to create planned urban districts, infrastructure corridors and economic zones and protects landowner interests in the process.

There is also a clear case for impact based investment. If governments strategically plan and invest in integrated urban and economic development, they can expect multiplier returns in GDP, employment and regional output. Cities then become platforms for growth, not just centres for service delivery.

Therefore, our urban development approach must shift from a portfolio of infrastructure projects to planned economic ecosystems. Cities should not narrowly focus on whether or not they need a new flyover or water system. Investments should be understood in terms of how they enhance the city’s long term roles within a bigger regional economy. The next phase of development in India, towards Viksit Bharat 2047, will not come from major cities or infrastructure alone. It will emerge through a network of cities growing together, supporting one another and building shared economic strength.

The writer is a leading management consultant who has travelled and worked in more than 70 countries. He recently founded Primus Partners, now recognised as India’s own Big Four, with offices in India, US, UAE, and KSA. He has held leadership roles at global consulting firms including Accenture, KPMG, and PwC. His areas of expertise include public policy, investment advisory, and digital transformation.