The Ministry of Housing and Urban Affairs is focusing on promoting planned urbanisation in peri-urban areas to curb haphazard growth and illegal construction. As part of its recommendations to the Sixteenth Finance Commission, the ministry aims to incentivise state-level planning for urban expansion in these areas. The commission, which will finalise its recommendations by October 2025, seeks to improve the revenue generation of urban local bodies while encouraging sustainable development.

This shift in focus from urban to peri-urban areas follows the Fifteenth Finance Commission's emphasis on cities, marking a new approach to urbanisation in India. The ministry has established sub-groups to address various aspects of urban planning, including political and administrative reforms.