Policy Update
Tanvi Nerurkar
Introduction
India’s urban population is expected to reach nearly 600 million by 2030, accounting for about 40% of the country’s total population (Observer Research Foundation [ORF], 2025; OECD Observatory of Public Sector Innovation [OECD-OPSI], 2024). This rapid growth is putting pressure on the municipal governance system originally designed for much smaller cities. Most of India’s 4,800+ statutory towns and cities continue to depend on paper records or fragmented digital systems, with meaningful e-governance progress confined to a small number of well-funded cities (OECD-OPSI, 2024).
Due to this fragmentation, cities are often required to re-enter the same data multiple times, departments face coordination challenges, revenue collection remains inefficient, and citizens lack transparency regarding decision-making processes. Citizens increasingly expect local governments to provide the same level of transparency and convenience as digital banking and payment systems such as India Stack and UPI (Ministry of Housing and Urban Affairs [MoHUA], 2021b). This shift reflects a transition from traditional e-governance, which primarily digitised individual transactions, to Digital Public Infrastructure (DPI), which offers shared, standards-based digital systems accessible to any city, vendor, or citizen application.
The National Urban Digital Mission (NUDM), launched by MoHUA in February 2021 and established as a standalone Central Sector Scheme in 2024, is at the forefront of this transition. With 2026 set as the original target year for nationwide UPYOG-enabled services, it is timely to assess NUDM’s achievements, current status, potential risks of uneven progress, and the future direction of related policies (National Institute of Urban Affairs [NIUA], n.d.-a).
This article analyzes NUDM from both policy and implementation perspectives. It details the Mission’s structure, reviews its progress and funding status as of 2026, assesses ongoing institutional and technical risks, and evaluates how recent budgetary and policy developments, including AMRUT 2.0 reforms and the National Geospatial Mission, may influence its trajectory as India advances toward its Viksit Bharat 2047 objectives..
Background
NUDM was launched in February 2021 by MoHUA and the Ministry of Electronics and Information Technology (MeitY), along with related projects such as the India Urban Data Exchange (IUDX), SmartCode, the Smart Cities 2.0 portal, and the Geospatial Management Information System (GMIS) (India Urban Data Exchange [IUDX], 2022). The National Institute of Urban Affairs (NIUA), through its Centre for Digital Governance, leads the Mission (NUDM, n.d.-a).
In contrast to the Smart Cities Mission (2015–2025), which supported ICT projects in 100 selected cities and has since concluded, NUDM is designed as a public good accessible to all urban local bodies, regardless of size or digital maturity. It is provided as a free, ready-to-use, open-source platform rather than a competitive project (OECD-OPSI, 2024). NUDM is grounded in the design principles of the National Urban Innovation Stack (NUIS), as articulated in a 2019 strategy paper by MoHUA.
Its foundational DPI concepts include open standards, interoperability, open APIs, and a citizen-centric approach (NUDM, n.d.-c). To clarify these key terms: ‘Interoperability’ means that digital systems can easily communicate and exchange data with each other, regardless of the underlying technology or developer. ‘Open APIs’ (Application Programming Interfaces) are publicly available technical definitions that allow different software platforms to connect and share information seamlessly. A ‘citizen-centric’ approach means designing digital solutions with the needs and experiences of everyday users in mind, making services more accessible, transparent, and easy to use.
NUDM’s Digital Governance Architecture
Figure 1. NUDM’s three-pillar architecture and four technical building blocks. Source: NUDM Strategy Document (MoHUA, 2021a); NUIS Strategy & Approach Paper (2019).
NUDM is structured around three pillars: People, Process, and Platform, supported by four technical building blocks (NUDM, 2024a). At its core is the National Urban Innovation Stack (NUIS), which provides reusable open APIs and shared digital services, enabling cities to adopt standardised solutions rather than develop bespoke software. The flagship reference implementation, UPYOG (originally the National Urban Governance Platform, developed with eGov Foundation on the DIGIT stack), serves as an open-source operating system available at no cost to urban local bodies (ULBs) (NUDM, 2025a; OECD-OPSI, 2024).
Building on this stack, the India Urban Data Exchange (IUDX), developed with the Indian Institute of Science, Bengaluru, is a Bureau of Indian Standards-compliant platform enabling secure, real-time data sharing between city departments, citizens and third-party applications; by 2023 it had been deployed across more than 35 smart cities (IUDX, 2022, 2023). Digital Registries for property, buildings, roads, and utilities form the authoritative data layer beneath city applications, while Urban Digital Platforms deliver citizen-facing services, approvals, tax payments, grievance redressal, and billing through UPYOG modules and State portals.
Performance assessment: Current Standing of NUDM
Figure 2. NUDM’s budget trajectory and key milestones, 2021–2026. Source: Janaagraha (2025); ORF (2025); NIUA/UPYOG (2026); NUDM News (2025).
By early 2026, NUDM had moved beyond the pilot phase. UPYOG now includes 18 service modules that cover government-to-government, government-to-business, and government-to-citizen functions. There are Memoranda of Understanding with 32 out of 36 States and Union Territories, reaching over 3,300 urban local bodies (NIUA, n.d.-b). At the same time, the UMEED real-time dashboard is active with data from 16 States. UPYOG has also been recognised as a Digital Public Good by the Digital Public Goods Alliance and received a Gold Award for digital infrastructure at the ETGovernment DigiTech Awards 2025 (NUDM, 2025b, 2025c).
Nevertheless, the rollout remains inconsistent across States. For example, Himachal Pradesh has signed an agreement with MoHUA and NIUA to implement UPYOG-based e-services in 60 urban local bodies, whereas Meghalaya, Manipur, and Jharkhand have only recently joined and are in the initial phases of implementation (NUDM, 2025a). This variation—from States with multiple active modules to those at the outset demonstrates that the number of Memoranda of Understanding does not accurately reflect the extent of digital service delivery experienced by citizens.
The funding situation is even more uneven than the adoption numbers suggest. NUDM’s Budget Estimate for FY 2024–25 was ₹1,150 crore, but the Revised Estimate dropped to just ₹108.7 crore, which is only about 9% of the original amount. The estimate then rose again to ₹1,250 crore for FY 2025–26, accounting for about 1.3% of MoHUA’s total urban development budget of ₹96,777 crore (Janaagraha Centre for Citizenship and Democracy, 2025; ORF, 2025).
Several factors may help explain this wide gap between allocated and actual spending. Administrative bottlenecks, such as delays in approval processes and disbursement mechanisms, have slowed the absorption of funds at the state and city levels.
Limited technical and staffing capacity in many urban local bodies has also led to slower rollout of digital services, making it difficult to justify the release of the full allocated budget. In some cases, shifting political priorities or procedural requirements for compliance with new regulations, such as data protection and procurement norms, have further contributed to the shortfall.
Along with the end of the Smart Cities Mission from FY 2025–26, this underlines that NUDM is now the only major program for urban digital governance. However, its ability to use funds effectively has not yet kept pace with its goals, and underfunding could slow the transition from pilot projects to full-scale delivery.
Funding linked to reforms shows a similar pattern of mixed progress. Under AMRUT 2.0, Finance Commission grants to urban local bodies depend on property-tax growth, but the number of States meeting this requirement dropped from 22 in FY 2023–24 to just 16 in FY 2024–25. Still, where digital systems have been adopted, the impact is clear. For example, Indore used GIS-based property surveys in its ‘Naksha’ project along with digital payments, helping the city collect over ₹1,000 crore in municipal taxes for the first time in FY 2024–25, a 27.5 % increase from the previous year.
Governance Opportunities and Early City Evidence
Figure 3. Five domains of municipal functioning where NUDM seeks to create governance gains.
NUDM demonstrates significant advantages across five principal domains. In municipal governance, shared standards facilitate seamless data exchange across functions such as property tax, water supply, urban planning, and solid waste management, reducing the need for customised digital solutions. For service delivery, online modules for approvals, licences, and grievance redressal streamline administrative processes and reduce informal costs. In municipal finance, GIS-linked property records integrated with digital tax systems enable municipalities to identify under-assessed properties and strengthen revenue administration.
For instance, Indore’s GIS-enabled property database and digital revenue management reforms formed part of a broader digital governance strategy that enabled the Indore Municipal Corporation to surpass ₹1,000 crore in municipal revenue collection in FY 2024–25, approximately 27.5% higher than the previous year. For urban planning, real-time data shared through the India Urban Data Exchange (IUDX) supports evidence-based infrastructure prioritisation, with several cities also piloting digital twin technologies. In terms of citizen participation, open data portals and mobile grievance applications improve transparency by providing residents with greater visibility into municipal decision-making and service delivery (Smart Cities Mission, MoHUA, n.d.; Times of India, 2025).
Figure 4. Selected IUDX-enabled city applications. Source: IUDX (2023); eGov Magazine (2023); OECD-OPSI (2024).
Pune’s Safetipin safety application utilises IUDX data on street lighting and crowd density. Surat’s transit applications deliver real-time bus arrival information. In Varanasi, sensor-equipped garbage trucks have reduced collection costs by approximately 30%. Vadodara has established on-demand emergency corridors. Notably, Kannur, which is not included in the Smart Cities Mission, became the first city in Kerala to adopt IUDX independently. These cases illustrate that Digital Public Infrastructure (DPI) applications extend beyond cities participating in the Smart Cities Mission (IUDX, 2023; eGov Magazine, 2023).
Challenges & Risks
These benefits are not guaranteed. Most urban local bodies, especially in smaller towns, lack dedicated IT staff, which makes it hard to change workflows and leads to resistance that technology alone cannot resolve (OECD-OPSI, 2024). To address this, some States and partners have implemented capacity-building programs, on-site training, and dedicated technical helplines to support staff during the transition.
Peer learning workshops and forums, where cities share practical lessons and success stories, have also helped build confidence and reduce apprehension. In certain cases, the introduction of incentive programs and recognition awards for digitally advanced ULBs has encouraged greater willingness to adopt new systems. On the technical side, older, vendor-specific software makes switching difficult, and not all States enforce NUDM’s open API standards equally. These challenges help explain why implementation varies so much.
Figure 5. Institutional, technical, financial, privacy and inclusion risks facing NUDM implementation.
The sharp drop in funding from a ₹1,150 crore Budget Estimate to a ₹108.7 crore Revised Estimate in FY 2024–25 is a governance risk. It shows that States and urban local bodies are not yet able to use funds as quickly as the Mission planned, especially now that Smart Cities Mission funding has ended for many cities (Janaagraha, 2025).
Privacy and cybersecurity have become greater concerns since the Digital Personal Data Protection Act, 2023, which requires consent and data-fiduciary responsibilities that many urban local bodies are only now beginning to address, often without dedicated data protection officers. There are also ongoing risks of digital exclusion: people without smartphones, internet access, or digital skills may be left out as services move online without keeping offline options, a problem highlighted by the World Bank and UN-Habitat in their guidance on inclusive GovTech design (Dener et al., 2021; UN-Habitat, 2022).
Impact: Future Trajectory Towards Viksit Bharat 2047
Policy developments in late 2025 and early 2026 suggest that NUDM will become part of a broader national effort instead of expanding on its own. The Union Budget 2025–26 introduced the National Geospatial Mission to create modern, accurate geospatial infrastructure for Viksit Bharat 2047, along with a ₹1 lakh crore Urban Infrastructure Development Fund and an Urban Challenge Fund for city reforms (Press Information Bureau, 2025; ORF, 2025). Since digital registries and GIS-linked property records are central to NUDM, integrating it with the Geospatial Mission is a logical and increasingly emphasised next step (PIB, 2025).
At Municipalika 2026 in February, Union Minister Manohar Lal told delegates from over 300 cities that achieving Viksit Bharat depends on building strong, secure, and sustainable cities through coordinated governance, infrastructure investment, and technology integration. This positions NUDM as a link between AMRUT 2.0, the Geospatial Mission, and India’s 2047 development goals, rather than just a separate IT project (India CSR, 2026). Whether this leads to steady, usable funding rather than the unstable budget seen in FY 2024–25 will determine whether NUDM’s next phase is more successful than the first.
Way Forward
- Improve fund absorption in ULBs through capacity building and simplified disbursement so allocations are not repeatedly revised down, as in FY 2024–25.
- Invest in cybersecurity and DPDP-compliant data protection, including ULB-level data protection officers and regular audits.
- Promote open-source, interoperable systems, resisting vendor lock-in even as private partners deliver implementation.
- Integrate NUDM’s digital registries with the National Geospatial Mission to avoid duplicate data infrastructure.
- Build common digital standards uniformly across States, closing the gap between published standards and on-ground enforcement.
- Improve digital inclusion through accessible, multilingual interfaces and preserved offline or assisted channels.
- Track adoption depth, not just MoU counts; how many onboarded ULBs deliver end-to-end digital services, not merely sign agreements.
- Foster citizen trust through transparent data governance, publishing what is collected, by whom, and for what purpose.
Conclusion
Five years after its launch, NUDM has demonstrated measurable institutional progress. As of 2025, 32 States and Union Territories have signed Memoranda of Understanding (MoUs), over 3,300 Urban Local Bodies (ULBs) have been onboarded, 18 UPYOG modules are operational, and the platform has been recognised internationally as a Digital Public Good. Following the conclusion of the Smart Cities Mission, NUDM now serves as India’s primary national programme dedicated to urban digital governance. However, its FY 2024–25 budget performance revealed a substantial gap between allocated and actual expenditure, with only a small proportion of the sanctioned funds utilised. This highlights that institutional onboarding alone does not necessarily translate into effective implementation or service delivery.
Looking ahead, the FY 2026–27 Union Budget will be a critical test of the Government’s commitment to scaling urban digital public infrastructure. To strengthen implementation, NUDM could adopt a performance-linked funding approach similar to AMRUT 2.0, where financial support is tied to demonstrable outcomes rather than institutional enrollment alone.
Accordingly, programme success should be assessed not by the number of MoUs signed, but by implementation indicators such as the conversion of signed MoUs into live, functional UPYOG deployments and sustained module adoption across Urban Local Bodies. Aligned with complementary initiatives such as the National Geospatial Mission, AMRUT 2.0, and the Viksit Bharat 2047 vision, NUDM has the potential to become the digital backbone of urban governance, provided future investments prioritise implementation, institutional capacity, and measurable outcomes alongside technological innovation.
References & Bibliography
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Ministry of Housing and Urban Affairs. (2021a). National Urban Digital Mission [Strategy document]. National Institute of Urban Affairs. https://niua.in/intranet/sites/default/files/2781.pdf
Ministry of Housing and Urban Affairs. (2021b). Building urban resilience through digital public infrastructure. National Urban Digital Mission. https://www.nudm.mohua.gov.in/building-urban-resilience-through-digital-public-infrastructure/
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About the Contributor
Tanvi is currently working as a Research & Editorial Intern at IMPRI. She holds a Bachelor’s degree in Architecture from VESCOA, University of Mumbai and is presently pursuing a Master’s in Urban Management at CEPT University, where she explores cities through research-driven policy approaches, adaptive governance frameworks, and sustainable development initiatives. Her objective is to contribute implementation-oriented policy research that supports the efficient functioning of cities and creates meaningful value for society at large.
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Anushree Khare
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The author extends her sincere gratitude to the IMPRI team for their invaluable guidance throughout the process.
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