Gujarat, with 42.6 % of its population residing in the urban areas, is among the top three urbanized states in the country. Keeping in line with the current trends in the state, it is estimated, that by 2020, the state would be home to an urbanized population of 35 million. And almost 55% of the State’s population would be residing in urban areas.

Given this rapid pace of urbanisation, there is a critical need to increase investments in improving urban infrastructure. The urban infrastructure levels in Gujarat’s cities clearly reveal that past investments levels have not kept pace with the increasing needs of the urban population. Deterioration in the service levels of core civic infrastructure such as water supply, sewerage and solid waste management has been a direct consequence of inadequate investments. In order to address such issues and to facilitate a directed urban growth, significant initiatives by way of schemes have come about in the recent past viz. Jawaharlal Nehru National Urban Renewal Mission (JNNURM), Urban Infrastructure Development Scheme for Small & Medium Towns (UIDSSMT), Basic Services for Urban Poor (BSUP) and Integrated Housing & Slum Development Programme (IHSDP). The Govt. of Gujarat has also undertaken many initiatives to improve its urban infrastructure. The state celebrated 2005 as the `Urban Development Year’ and established the Gujarat Urban Development Mission to implement reforms on a fast track basis, facilitate planned development of identified cities, community participation, accountability, etc. Municipal Accounting Reforms were implemented in all Municipal Corporations and Municipalities. Similarly, many initiatives have been taken in the area of property tax reforms, revision of user charges etc. to cover costs, and compensate for the loss of revenue due to abolition of octroi. Thus, though Gujarat has been one of the better performing States in India in terms of municipal finance and reforms, there is still a substantial gap in service levels that need to be bridged. Urban Infrastructure covers key urban services in the areas of water supply, sewerage and sanitation, solid waste management, storm water drainage and municipal roads.

Further, various economic activities are being planned around Delhi Mumbai Industrial Corridor (DMIC), Dedicated Freight Corridor (DFC), Special Investment Regions (SIRs) and Ports as key economic drivers for the State in the next 10-15 years. The activities would include industries, IT and IT-enabled services, logistics management etc. Most investments in these new economic activities would gravitate to destinations where high quality real estate and support infrastructure are available. The competition between such potential locations takes place on a global scale.