India is urbanizing at a rapid pace. The level of urbanization has increased from 17.29% in 1951 to 31.6% in 2011.

India’s urban population, which is nearly 377 million, is projected to grow to 600 million by 2030. Considering the rapid urbanization and the imminent need for enhancing mobility in cities, it is imperative to strengthen mass transit systems and to explore alternative and innovative sources of funds to supplement budgetary resources.

Metro rail has been selected as the backbone mass transit system in many Indian cities. Most of the metro rail projects have been financed by the central government in partnership with state governments, or by state governments alone. The Government of India through its Metro Rail Policy 2017 has linked the metro rail system to the adoption of the National Transit-Oriented Development (TOD) Policy and land value capture (LVC) financing framework. The policy defines TOD as a measure to integrate land use and transport planning through the development of well-planned and sustainable urban growth centers linked with high-quality transit systems.

These will support walkable and livable communities, with high-density and mixed land use, where citizens have access to open, green, and public spaces and, at the same time, will enjoy efficient transit facilities.

The Asian Development Bank (ADB) has been providing financial assistance for the development of various mass transit systems in major Indian cities. In addition to the assistance for Jaipur Metro in 2013 and Mumbai Metro in 2019, ADB has approved financial assistance to develop the Delhi–Meerut rail rapid transit system and Bengaluru Metro in 2020. ADB is currently working with the government on preparing the proposed expansion of the metro systems in Chennai and Kochi. In line with the government’s Metro Rail Policy 2017, ADB seeks to strengthen the planning and implementation of TOD and LVC associated with these mass transit systems as value addition to enhance ridership and non-farebox revenue.

The purpose of this study is to understand the status of TOD and LVC planning and implementation, identify critical issues in implementing such initiatives in the Indian context, and explore how land use management policies may generate multiple socioeconomic benefits through densification.

The findings of the study are presented in two sections. The first section uses literature and various data sources to explore the status of TOD and LVC planning and implementation in several major Indian cities. The qualitative analysis in the study uses the same three-pronged approach used in a similar study by ADB in 2019 to understand the main challenges to effectively implementing TOD and LVC in India. These are