Leveraging transit-oriented development to build productive cities

Indian cities investing in metro rail projects to enhance urban mobility, generate jobs, and unlock economic potential.

Indian cities are on the brink of a transportation revolution, with a projected expenditure of ₹3 trillion (between 2022–2027) set to be spent on approved metro rail projects. These investments will not only enhance urban mobility but can also unlock vast economic potential.

Studies reveal that investment in public transportation can generate thousands of jobs and deliver economic returns 5-7 times greater than the initial outlay. To leverage investments in mass transit and maximise the economic benefits as well as improve quality of life in cities, the Government of India approved the National Transit Oriented Development (TOD) Policy and Metro Rail Policy in 2017, encouraging the adoption of TOD as a key urban planning and growth management strategy. With this national policy and funding push, 27 Indian cities are building metro rail systems, and many others are building other forms of rail- and bus-based mass rapid transit systems.

Public policies and land market conditions drive the development of economic centres in suburban and peri-urban areas, and public transport systems struggle to keep up with this outward sprawl. The resulting longer work–home commutes, and the congestion and pollution arising from greater private vehicular use, are hampering access to jobs and labour markets, productivity and liveability. Bengaluru, for instance, is among the world’s most traffic-congested cities, with the social cost estimated to be ₹38,000 crore annually (5% of the city’s GDP) as per 2018 figures.

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TOD presents a promising approach to address these challenges, while contributing positively to India’s low-carbon growth ambitions. Premised on the principle of land use–transport integration, TOD promotes compact, mixed-use development and sustainable transport modes, like walking, cycling and mass transit, effectively decoupling density from congestion and economic growth from resource use and carbon emissions. WRI India’s recent publication titled ‘Jobs near metro rail transit in Bengaluru: Enabling an accessible and productive city’ underscores the critical need for integrated spatio-economic planning and bringing jobs closer to transit through TOD, given its significant benefits and co-benefits.

Improving accessibility to jobs, through safe and efficient transport modes, can significantly enhance workforce productivity and participation. Workplace proximity and higher job densities drive transit rider-ship more effectively than residential density. Clustering job growth near transit creates an agglomeration effect that boosts innovation, productivity, and competitiveness — far more than dispersed job growth. Apart from expanding worker and customer catchments for businesses, it also spurs local economic and real estate development, leading to increased revenues for public agencies, which can be reinvested into infrastructure and service upgrades revitalising city neighbourhoods.

WRI India’s study examines the spatial distribution of jobs associated with registered factories (manufacturing enterprises) and shops and commercial establishments (service enterprises) in the Bengaluru Metropolitan Area (BMA).