Panagariya: India must urbanise fast to be developed by 2047

India cannot become a developed economy by 2047 unless it sharply accelerates urbanisation, economist and former 16th Finance Commission chairman Arvind Panagariya said on Friday. Speaking at the National Council of Applied Economic Research’s India Policy Forum 2026, he argued that the Centre has completed most big-ticket reforms, and the next wave must be led by state governments, which control land, urban governance and local regulations.

Panagariya noted that India's urban population rose from 17% in 1951 to about 35% today, far slower than South Korea, Taiwan and Japan during their rapid industrialisation. He said migration into cities, not just reclassifying villages, must drive urban growth, and identified land scarcity as the biggest constraint. He cited the Tata Nano project in Singur, where 1,000 acres involved nearly 12,000 separate land parcels, to illustrate the complexity businesses face.

He also called for creating large "Special Employment Regions" with unified governance and flexible labour and land rules, expanding affordable rental housing for migrants, and liberalising building regulations. According to livemint.com, Panagariya said Andhra Pradesh has removed prior land-use conversion requirements, while Telangana and Andhra Pradesh have reformed building rules. He concluded that public discourse wrongly blames the Union for issues constitutionally assigned to states, such as sanitation and piped water.