Aligning the Budget with city logistics

Efficient movement of people and freight, and reducing traffic congestion and pollution are just some of the urban solutions the Budget can help support

- SUMITA DAWRA.

India is urbanising rapidly and is expected to be the principal contributor to global urban growth over the next 25 years.

With an urban population exceeding 540 million, cities and towns currently account for about 35 percent of the total population of the country — a share projected to rise to nearly 50 per cent by 2050.

Urbanisation being a key growth driver, the Union Budget 2026-27 can play a critical role in strengthening urban logistics by supporting efficient movement of people and freight, incentivising digital tools for real-time monitoring and assessment, and derisking projects to attract private investment into urban infrastructure, reducing traffic congestion and pollution in the process.

The National Logistics Policy 2022 envisages the preparation of city logistics plans integrated with city master plans, along with institutional governance mechanisms such as city logistics committees. Fiscal measures such as the creation of an urban freight infrastructure fund, support for logistics parks, incentives for green freight pilots, financially strengthening urban local bodies for logistics planning and freight-management studies, and the use of digital tools for real-time monitoring of people and freight movement to better identify infrastructure requirements would provide a much-needed stimulus and significantly strengthen urban governance.

At the same time, incentivising cities through measurable performance metrics — whether for integrating logistics needs with town planning, or improving the efficiency of urban freight movement — is critical. The Budget could motivate cities to compete for annual, performance-linked grants based on demonstrated outcomes rather than proposals alone.