Urban Development

Executive Summary

Vision 2029-Sector papers

AP is rapidly urbanizing with a growth rate of 7% in the last decade, accounting for 30% of the state population in 2011. A strong correlation exists between urban population and economic growth, higher the urban population, greater is the economic growth due to agglomeration of resources, both physical and human. An imperative to improve living conditions and factors aiding economic growth in urban areas stem from this fact.

A snapshot of AP’s urban development vis-a-vis other states and cities is as follows:

Indicator Andhra Pradesh Top State 2nd Top State
Level of Urbanization 29.6% 48.4% (Tamil Nadu) 47.70% (Kerala)
Access to basic services 67.42% 85.21% (Himachal) 85% (Uttarakhand)
Slum Population 38.3% 1.3% (Kerala) 2.9% (Goa)

An as-is assessment revealed several issues with regards to urbanization in Andhra Pradesh. The major challenges are an increase in informal urbanization, polarized urban growth in large cities, high risk and exposure to natural disasters and poor living environment.

  • Due to lack of job opportunities and amenities in small and medium towns, urban population is increasingly concentrated in few major cities in the north and central of AP, namely: Visakhapatnam and Vijayawada. These two largest cities contributed over 28% of urban population growth in the state during year 1991-2011.
  • Most cities in AP lie on the coastal and eco-sensitive regions. Climate change poses a serious threat to coastal cities such as Visakhapatnam due to rise in sea levels, while hinterland cities such as Vijayawada, Guntur, Tirupati, Kurnool etc. face threats due to erratic weather patterns such as floods and droughts.
  • The growth of urban communities in rural and peri-urban areas (i.e. 'census towns') was very significant, contributing about 25% of urban population growth from Year 1991 to Year 2011. The lack of proper planning institutions and necessary urban infrastructure required to support these urban settlements eventually lead to severe social, health, and environmental issues. The effect of this is far more prevalent in census towns.
  • • With 38.3% urban population living in slum areas, the state of AP has the highest ratio of slum population to urban population in India. Nationwide, 17.4% of total urban populations are living in slum, less than half of AP’s figure. Slum population usually faces a shortage of basic infrastructure and services to sustain a healthy living environment. In slum area, 32.18 % households do not have safe drinking water facility, 17.64% households do not have latrine within house or nearby, 40.26% of households live in houses with single room or no room, and 9.29% households do not have cooking facility in the house and 13.67% use firewood for cooking.

The goals of urban development in AP is to achieve a better quality of life and social inclusion for urban residents, a higher rate of urbanization driven by industrialization and improvement of productivity, and sustainable urban growth that protect fertile lands and environmentally sensitive areas.

The vision statement for urban development in Andhra Pradesh is as follows:

AP cities of 2029 will be Productive, Inclusive, Sustainable, Smart and Well-governed:

  • Productive Cities will be national and international hubs for business and production that offer majority of residents with means to earn their living. Creation of jobs will be the primary objective and will be achieved through market positioning of cities, enhancing the quality of workforce, improving infrastructure (physical and social), and ensuring ease of doing business in AP’s cities.
  • Inclusive Cities will provide all residents opportunities and capacities to live in decent housing condition with access to basic services and share equitably the social benefits of city life. AP aims for universal coverage of all public and civic services, affordable housing for all, zero slums and zero poverty by 2029.
  • Sustainable Cities will be pioneers in minimizing the impact on fertile agricultural lands, ecologically sensitive areas and reducing per capita consumption of natural resources to sustain communities and enhance their livability. Focus will be on improving tree coverage in cities, achieving full waste water treatment and solid waste management, sustainable water use and water conservation practices, and sustainable urban transport network.
  • Smart Cities will be incubators that relentlessly capitalize on advanced technologies for informed policy making, managing complexities, increasing efficiencies, reducing costs of service delivery and improving quality of life for all residents. AP envisions developing 16 smart cities in Andhra Pradesh, equipped with high-tech communication capabilities. Participatory smart city development, highspeed internet connectivity, information technology and IoT enabled services will be implemented in all the smart cities.
  • Well-governed Cities will be exemplary in accountability, efficiency and open governance with strong and independent finance systems that empower citizens and support growth. Monitoring the performance management of the city governance is recommended to be done periodically to ensure that the city’s governance functions properly. City governance will be enhanced by improving ULB capacity to generate taxes and resources, efficient master planning and implementation, improving capacity of ULBs to deliver services.


  Theme Initiatives
Strategic Priorities for the Vision Productivity
  • Growth-Pole & Industrial Node Strategies
  • State coordination in infrastructure and industrial investment
  • Skill training for urban residents and migrants
  • Improve and expand urban High level of unemployment rates and road networks
  • Integration of slum into city development
  • Smart Region Authority
  • PPP model in service delivery
  • Improve and expand to 100% coverage for water supply, sewerage, drainage and solid waste collection systems
  • Growth-pole Strategy position 3 major urban regions in low-risk locations
  • Disaster management plan for ULBs
  • State-level coordination in land use and environmental protection
  • Innovative solutions for solid waste management
  • Improve and expand to 100% treatment level of sewerage, solid waste systems
  • Building urban public transport systems for all Class-I cities
  • Integrated GIS-based Urban Data Hub
  • Smart City development framework for AP cities
  • Expansion of information hub / Mee-Seva centers to efficiently provide information and governmental services
Good Governance
  • Strengthening ULBs politically and financially
  • Reforms of revenue generation systems
  • Improve land inventory through planning and management to employ PPP models

Plans and Schemes:

Three Smart Cities (viz. Visakhapatnam, Kakinada, Tirupati) and 33 AMRUT cities have been identified in Andhra Pradesh to promote smart governance and infrastructure development in these cities. Andhra Pradesh plans to develop 13 more Smart Cities. CISCO has already proposed a framework to develop ELURU as a smart city.

Government of Andhra Pradesh on the other hand, has set up a Special Purpose Vehicles to boost investments into urban infrastructure. 13 waste to energy plants are being built to ensure 100% waste treatment through the Swachh Andhra Corporation. Andhra Pradesh Urban Infrastructure and Asset Management Ltd. (APUIAML) is established to attract investments for financing and management of urban infrastructure projects in the state.

Andhra Pradesh Township and Infrastructure Development Corporation (APTSIDCO) has been constituted to take up Housing for All scheme in urban areas in Andhra Pradesh.

New ‘Economic Cities’ are being developed in Andhra Pradesh to promote walk to work environment by providing good quality of life. Urban Infrastructure Promotion Board (UIPB) has been constituted for this purpose.

Investment and Allocation:

Implementation of vision initiatives will require an investment of approximately INR 1 lakh crores and a huge chunk of this investment is to be sourced from the private sector. The state government has pledged a sum of INR 3120 crores for urban development as part of the plan budget for FY 2016-17, as opposed to an allocation of INR 563.70 crores in FY 2015-16, an increase of more than 5 times. The rest of the requirement for urban infrastructure will be sourced through the private sector.

  • Unemployment in AP’s cities will be 0.6% in 2029 as opposed to the current 4.3
  • 78% of AP’s labor force will be skilled, against the current 8.2%
  • AP will strive to achieve zero slum population by 2029
  • AP will achieve 100% coverage of water supply, sanitation, sewerage and solid waste management
  • 75% modal share of transport should be achieved by 2029
  • 16 smart cities will be established in the state, leading the way for other cities
  • All ULBs will be financially independent on operational expenditure