By Amit Kapoor and Nabha Joshi
Agglomeration Without Planning: Lessons from Gurugram’s Urban Development Crisis
In just three decades, the once-unremarkable Gurugram, dotted with agricultural lands and primitive infrastructure, has transformed into a corporate hub. The Millennium City represents India’s most ambitious urban experiment, blending government planning expertise and facilitation with private dynamism and innovation. As India races towards its Viksit Bharat goals, and as the development trajectory is catalysing urban transformations in multiple satellite and Tier 2 cities, it is imperative to take a closer look at Gurugram, a clear example of economic agglomeration principles in action, whose success story may be India’s most cautionary urban tale.
The initial trajectory of Gurugram exemplified the textbook definition of agglomeration economics. Gradually, the city witnessed improved productivity through strategic investments, innovation, a favourable regulatory environment, and connectivity with Delhi and major urban centres. In the NCR region, Gurugram showed the highest increase in urban infrastructure development. The built-up area, out of the total area of Gurugram, mushroomed from barely one-tenth (i.e., 50.6 sq. km) of the total area in 1990 to nearly half (i.e., 45.1%, or 210.4 sq. km) in 2018, revealing the scale of transformation. The city reported success in most metrics, achieving India’s second-highest per capita income at ₹9.05 lakh, only trailing behind Telangana’s Rangareddy at ₹9.46 lakh. The city of Gurugram also records one of the highest car ownership rates in India, of 323 vehicles per 1,000 residents. It attracts over 350 Fortune 500 companies alongside luxury residential developments and corporate offices that rival international infrastructure developments. But this trajectory has eventually reached an inflexion point. The very factors that enabled Gurugram’s success, such as proximity to the national capital, the accelerated creation of urban spaces, and the massive influx of a working population, are now turning into constraining factors to liability and operational efficiency.
The city is nearing its maximum threshold capacity for human, environmental, and vehicle density. The sky-high rents and lack of affordable housing force thousands to commute from surrounding areas to Gurugram. Average commute times from Delhi to Gurugram now range from 1.5 to 2 hours, with recent incidents documenting 7-kilometre traffic jams lasting up to 8 hours during monsoons. The cost of inconvenience, including operational, travel, and lost work hours, due to affordability crises and traffic bottlenecks, causes a severe productivity leakage in the economy.
According to GMDA’s comprehensive mobility management plan (CMMP), 21.9 lakh daily intra-city trips are taken in the city, with work and education-related commute comprising 85% of all trips. The economic implications of traffic congestion are substantial, leading to a loss of 1.17 billion man-hours and an economic loss of up to $1.3 billion.
Climate vulnerability compounds these challenges. The city faces contrasting seasonal extremes. Summer conditions turn Gurugram into an urban heat island, registering the highest Land Surface Temperature variations among NCR satellite cities. At the same time, the monsoon generates transportation gridlock due to flooding of roads, impervious concrete surfaces, degradation of vegetation cover, and increased built-up areas. This pattern is not unique or new. It reflects a well-established economic theory that if cities don’t continuously adapt to demands, agglomeration has an expiry date. Its effects contribute positively during early development phases when infrastructure capacity exceeds demand, but generate negative returns once infrastructure reaches its limit. Cities like Mumbai and Bangalore demonstrate similar trajectories. Yet, Gurugram’s situation intensifies due to specific administrative decisions made during the rapid development phase, as well as the consistent neglect of climate- and people-responsive planning.
During the developmental process, the initial policy framework created favourable conditions for private sector urban development. Haryana enacted strategic legislation in the 1970s: the legislature passed several laws to enable large-scale land acquisition for private firms to develop townships by relaxation of NAC requirements, and empowering private players to procure licenses and acquire extensive agricultural lands for development of townships through the Haryana Development and Regulation of Urban Areas Act of 1975 and the Haryana Urban Development Authority Act of 1977. This regulatory environment facilitated efficient land assembly by developers and enabled optimal routing of transportation infrastructure through privately developed townships. However, this market-driven approach has generated significant governance fragmentation, as multiple agencies, including the GMDA, Municipal Corporation of Gurugram, and HUDA, operate with overlapping jurisdictions but lack a cohesive strategy and precise accountability mechanisms for infrastructure development and maintenance, resulting in coordination failures.
This ungoverned building spree transformed into an environmental crisis due to the oversight of regulations, climate and sustainable urban development strategies. Construction activities and widespread encroachment on natural drainage systems, including traditional nullahs (stormwater drains), wetlands, riverbeds, and historical water bodies that previously functioned as flood management infrastructure, have altered the natural channels of water flow, disrupting the city’s hydraulic capacity, compromising the ability to manage monsoon runoff, and leading to severe waterlogging crises. These infrastructure issues also create mobility and accessibility issues for the working population. Gurugram’s mobility challenges stem from multiple urban design inadequacies, including insufficient highway connections and exit points, which hinder the circular movement of people and resources, resulting in recurring traffic bottlenecks. In an effort to achieve sustainable urban design, corporate buildings have obtained LEED sustainable certifications, and commitments to attain net-zero by 2050 have been made. But the broader infrastructure framework incentivises carbon-intensive transportation patterns. To enhance the city’s limited metro connectivity, the GMDA launched a Comprehensive Mobility Plan, which identified the need for 1,550 buses by 2026. Currently, the actual fleet stands at a mere 200 operational CNG buses (150 in Gurugram, 50 in Faridabad). This 87% implementation shortfall clearly highlights the underinvestment in public transit infrastructure in relation to the scale of urban development. Looking ahead, the city’s strategies should heavily rely on sustainable urban planning strategies and decongestion. Developing sustainable urban drainage systems (SUDS), such as permeable pavements, rain gardens, and retention ponds, can help manage runoff more effectively. This can be achieved by implementing a system of proactive maintenance, regular drain desilting, and inter-agency coordination.
At this stage, Gurugram may have reached a point where addressing deficits is costly or only damage control is possible. Still, the emerging satellite cities can avoid similar trajectories by implementing climate-responsive planning, integrated public transit systems, sustainable urban planning strategies that account for the influx of workers, and coordinated governance structures from the outset. Future urban centres must internalise the full social costs of agglomeration, rather than externalising environmental and mobility burdens onto the aspirational population that they drive. Suppose these cities learn from the experience of Gurugram. In that case, they might not have to make the Faustian bargain between development and liveability, sacrificing social benefit at the cost of urban development.
The article was published in The Statesman on October 8, 2025.
