Policy Update
Deepankshi Agnihotry
Industry 5.0 has arrived with full force. Whenever an industrial revolution occurs, it brings with it a host of new beginnings, one of which is the accelerated pace of urbanization.. In India, the world’s most populous country with a significant demographic advantage, urban expansion has been particularly notable. By 2020, approximately 35% of Indians resided in urban areas, a figure projected to rise to 40% by 2030( Economic Survey 2023–24).
Amidst accelerating urban development, it is essential for India to prepare and be ready to harness its potential. But what truly drives urbanization and meaningful urban development? It is the effective management of data.
Recognizing this, the Government of India launched the National Urban Digital Mission (NUDM) in February 2021(as a pilot)-a milestone moment that coincided with India’s first-ever digital Union Budget.
Imagine a city, in coming up with the pace of urbanization, tries to make its own separate digital systems-like for water supply, garbage collection, housing permits, or grievance redressal. Won’t it be chaotic, inconsistent, expensive, and inefficient?
As cities expand, coordinated digital infrastructure becomes indispensable. To endure efficient public delivery, NUDM was launched as a new scheme in 2024, under the Ministry of Housing and Urban Affairs along with the Ministry of Electronics and Information Technology, with the aim to develop a holistic shared digital infrastructure that can be utilized by all urban local bodies. For NUDM, National Institute of Urban affairs(though the Center for Digital Governance) acts as a nodal technical institution, contributing to design development and implementation of the mission.
What is NUDM?
Source-NUDM
The National Urban Innovation Stack (NUIS) provides the foundational framework on which the NUDM is built. The goal is simple yet ambitious- to deliver municipal services digitally and seamlessly to citizens across the country.
NUDM being digital public good, is a form of open-source code and application programming interfaces (APIs), which shall be the building blocks for all the stakeholders viz. government, academia, civil society, and industry. It works across three pillars that defines the whole mission:
Pillar 1 – People
Under this pillar, the focus is on how digital urban governance works for people. Empanelled implementation partners will be involved to make national urban governance plans for each state/UT. Additionally, a Program Management Unit will be set up, and investment will be made in building capacity. Best practices would be scaled nationwide for people’s holistic digital transformation.
Pillar 2 – Process
This pillar highlights that the government has moved away from the heuristic of “one size fits all.” Now, individual states and UTs will be able to choose implementation models according to their needs. Also, a ready-to-use model will be provided.Proper standardization and benchmarking will also be carried out .Also, a Model RFP will be provided for smooth and faster implementation.
Pillar 3 – Platform
To further facilitate the journey nine most commonly used services such as property tax, public grievances, among others, will be provided, under which the states are free to choose from three engagement models. All these will be available through a free-of-cost, ready-to-use, open-source software platform – Urban Platform for DeliverY of Online Governance (UPYOG). This choice-based model is designed to cater to the needs of different states and UTs.
States/UTs can adopt one of the following three engagement models:
| Model | Description | Affordability | Suitability |
| Model 1 | Adopt UPYOG in a centrally hosted platform (Service model – PaaS). | Get started at a low cost of adoption and short time to go live. | Suitable for greenfield states. |
| Model 2 | Adopt UPYOG with a State/UT-hosted (data center/cloud) setup. | Moderate cost and higher control. | Suitable for brownfield states with discrete systems or apps. |
| Model 3 | Continue using existing systems, including those developed under AMRUT 2.0. | Use NUDM standards and APIs to get an integrated view of services. | Suitable for states/UTs with mature systems already in place. |
Source-MADE WITH GOOGLE SHEETS
Real Picture
The government shows a bright picture of a future that keeps pace with the digital world around the globe, but the real picture shows something different. The mission was launched in 2021 as a pilot and then formally introduced as a new scheme three years later in 2024, which is understandable as making the framework and other planning needs time. But the BE for the scheme in 2024–25 was announced as ₹1,150 crores, and the RE for the same year came drastically down to just ₹108.70 crores..
If urban development is a priority, why such a lag? Budget 2025–2026 saw a revision to ₹1,250 crores. Now it’s a wait-and-watch situation to see if the government is really keen on transforming urban development.
Way Forward
NUDM holds potential in reshaping urban governance with , there is no doubt in that. Supporting this mission are tools like the SmartCode Platform, which allows collaborative development of open-source urban solutions, and the Geospatial Management Information System (GMIS)-a map-based interface that acts like a real-time dashboard, offering administrators a comprehensive view of ground-level activities.
However, to make the dream a reality, the following steps are crucial:
First, the government has to ensure timely release and efficient use of funds, with bureaucracy playing the role of a facilitator, not a barrier.
Second, established digital frameworks like Aadhaar, UPI, and JAM trinity should be effectively integrated into the governance plan to avoid redundancy and enhance delivery.
Third, heavy investment in capacity building is needed. Citizens must be trained in technical domains to participate meaningfully.
Fourth, digital equity between Tier 1, 2, and 3 cities is vital. Investment made must ensure inclusive growth and smooth transition.
Fifth, urban services should not be operated in isolation. Effective coordination between departments is key to successful digital governance.
Last but not least, the governance plan must address climate change challenges and integrate itself toward achieving SDG 11 – Sustainable Cities and Communities.
Conclusion
Urban development is undoubtedly a crucial sector that will accelerate the vision of Viksit Bharat @2047.The budget saw commendable spending on urban affairs, with the MoHUA receiving ₹96,777 crore, marking a 52% increase from the revised estimate of ₹63,699 crore in 2024–25. With missions like the Urban Challenge Fund and NUDM, urban digital transformation in India is not a distant dream. The question now remains one of political will-whether the government is willing enough to carry out this overhauling digital transformation? The next budget will be a litmus test for this.
References
- Rajya Sabha Secretariat. (n.d.). Unstarred Question No. 1805 – NUDM. Retrieved April 12, 2025, from https://sansad.in
- NIUA. (n.d.). National Urban Digital Mission. Retrieved April 12, 2025, from https://niua.in
- OECD OPSI. (n.d.). NUDM – India. Retrieved April 12, 2025, from https://oecd-opsi.org
- Vikaspedia. (n.d.). NUDM overview. Retrieved April 12, 2025, from https://socialwelfare.vikaspedia.in
- Smart Cities Mission. (n.d.). NUDM. Retrieved April 12, 2025, from https://smartcities.gov.in
- MoHUA. (n.d.). What is NUDM?. Retrieved April 12, 2025, from https://nudm.mohua.gov.in
- PIB. (2022, March 3). NUDM launch. Retrieved April 12, 2025, from https://pib.gov.in
- GoI. (2022). Demands for Grants: MoHUA. Retrieved April 12, 2025, from https://indiabudget.gov.in
- PIB. (2021, Feb 23). NUDM by MoHUA. Retrieved April 12, 2025, from https://pib.gov.in
About The Contributor
Deepankshi Agnihotry is a research intern at IMPRI and holds a postgraduate degree in Electronics, is curious and passionate about sustainability and impactful policy solutions.
Acknowledgement
The author would like to express sincere gratitude to Dr Arjun Kumar, Dr Vaishali Singh,Ms Aasthaba Jadeja, and the IMPRI team for giving the opportunity for writing the article.
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