India’s cities are growing faster than ever before, and with that growth comes both tremendous opportunity and urgent challenges. With nearly half the country’s projected population expected to live in urban areas by 20471, the challenge is no longer whether cities will grow, but whether they can grow in a way that is sustainable, inclusive, and liveable. Rapid urbanisation has brought in not only opportunities but also pressing challenges. Overcrowding, uneven development, informal settlements, and infrastructure gaps are becoming the norm. Essential services like transport, water, and waste management are under strain, while factors like environmental degradation, pollution, and the rise in extreme weather events put public health at risk. Vulnerable communities bear the brunt of these pressures, highlighting the urgent need for smarter governance and proactive planning.

      The potential of artificial intelligence to transform urban India is widely recognised. Globally, cities are adopting AI to make planning and governance more efficient, predictive, and citizen-centric. We often read about how AI can help city administrations anticipate problems, optimise resources, and respond to residents’ needs in real time. For instance, digital twins of cities are held up as powerful tools that simulate the impact of new construction on traffic, air quality, and demographics, allowing planners to make informed decisions before development begins. Predictive maintenance systems detect faults early, reducing emergency repairs, extending asset life, and saving costs. Cities like New York have piloted sensor-driven AI systems for subway track maintenance, identifying defects proactively, and ensuring more reliable transport for millions of commuters2.

      Traffic management is another area where AI can have a tangible impact. Dynamic traffic signals, route optimisation for emergency services, and integrated monitoring systems can reduce congestion and enhance road safety. India has already begun implementing AI-powered traffic management systems on major expressways3, combining surveillance, violation detection, and real-time notifications to improve compliance and responsiveness. Lessons from London’s AI-enabled traffic and public transport systems show how real-time data can minimise congestion, improve passenger flow, and make streets safer4.

      Waste management, a pressing concern for rapidly growing cities, can also benefit from AI. Smart bins, automated segregation, and predictive collection schedules can reduce costs, emissions, and inefficiencies while keeping cities clean. Barcelona’s AI-driven waste management system has cut unnecessary collection trips by 30 per cent, reduced fuel consumption, and improved overall efficiency5, showing how data-driven approaches can transform public services. Similarly, AI can enhance public health by analysing hospital data, monitoring outbreaks, and supporting emergency responses. Cities like Buenos Aires use AI to integrate health records, forecast disease trends, allocate resources, and guide targeted interventions, widening access to care and making health systems more responsive6.

      Urban climate resilience and environmental sustainability are equally critical. AI tools can map urban heat islands, predict pollution trends, optimise energy use, and simulate disaster impacts, enabling proactive responses. Amsterdam’s smart grids demonstrate how AI can stabilise energy supply, improve efficiency, and empower communities to manage their resources sustainably7. AI can also support governance and citizen engagement. From virtual assistants to predictive policing and online service platforms, AI enables governments to streamline operations, improve public service delivery, and make city administration more responsive and transparent.

      But knowing the potential is not enough. The real question is: how can Indian cities translate this promise into reality? The answer lies in focusing on practical, localised solutions such as investing in digital infrastructure, strengthening administrative capacity, enabling real-time data integration, and embedding predictive decision-making into governance workflows.

      While global examples provide valuable lessons, India must focus on local solutions. India’s urban challenges are complex and unique, from sprawling informal settlements to outdated legacy systems. To make AI effective, we must move beyond theory and isolated pilots toward scalable solutions that reflect the local context. This means empowering municipal bodies to act on data insights, building cross-departmental platforms for shared information, and establishing transparent governance frameworks that hold decision-makers accountable for outcomes.

      Cities are diverse in demographics, culture, geography, and resources, and AI must be tailored accordingly. Surat, for instance, uses AI to monitor and manage stray cattle on roads, combining live video feeds with algorithmic detection to alert authorities and prevent accidents8. Such localised AI solutions ensure relevance, efficiency, and real-world impact. Equally important is designing systems that are inclusive and unbiased, reflecting India’s social diversity and ensuring equitable benefits for all citizens.

      The case for AI in Indian cities is compelling. It offers the chance to move from reactive governance to predictive, proactive urban management. AI is not a panacea; it must be integrated thoughtfully into planning, infrastructure, health, mobility, waste management, and governance. Yet, if deployed at scale and with purpose, it can help cities grow sustainably, improve citizen well-being, and make urban India globally competitive. The choices we make today will define whether our cities become congested, chaotic spaces or liveable, efficient, and inclusive hubs of opportunity.

      India has the talent, the innovation, and the will to harness AI for urban transformation. The imperative is clear: invest in digital infrastructure, build administrative capacities, adopt localised strategies, and ensure AI systems are inclusive, transparent, and accountable. By doing so, India can realise a vision of urban development where technology serves people, not the other way around; a vision where our cities are not only smart but also sustainable, equitable, and resilient. AI-powered governance can become the backbone of India’s journey from Swaraj to Smart Raj, turning challenges into opportunities and aspirations into reality for generations to come.


      [1] Cities as Engines of Growth, NITI Aayog, May 2022
      [2] New York launches AI-driven track maintenance pilot, Cities Today, 4 March 2025
      [3] Vizag to come under AI-based integrated traffic management system, Times of India, 14 September 2025
      [4] Using Artificial Intelligence to Improve Transport in London, Cow-Shed, 29 May 2024
      [5] The use of Recent Smart Waste Management Systems with Artificial Intelligence, International Journal of Management Science and Research, ISSN No- 2584-2706, April 2025
      [6] Health, Latin America, and the Promise of Artificial Intelligence, Think Global Health, 15 November 2024
      [7] How smart grids are enabling Amsterdam's energy transition, I amsterdam, 5 December 2023
      [8] Urban India turns to Artificial Intelligence to manage civic woes, Hindustan Times, 4 August 2025

      Author

      Akhilesh Avanish

      Lead Partner- Urban transformation, Government and Public Services

      KPMG in India

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