This study argues that India’s urban growth is more sluggish than most observers believe and that the developed states and large cities are receiving most of that growth, while backward areas and smaller towns are tending to stagnate. Although adult male migration is considered as an effective mechanism for improving economic well-being and escaping poverty, their net migration into urban areas has not gone up over the past five decades. A slow and top-heavy pattern of Indian urbanisation is contributing to persistent inequalities. More importantly, the recent moves for empowerment of local bodies through a new system of urban governance have also contributed to increased spatial inequality. Obvious responses would be more inclusive population policies in the successful and large urban centres or, alternatively, more support for economic growth in smaller urban centres. The first is likely to face political obstacles, as urban elites and the middle class do not want to accommodate a large influx of low-income migrants. The second is also likely to face economic obstacles, as it can be difficult to find good public investment opportunities in smaller urban centres. However, without urban growth, the pursuit of both economic growth and equality will eventually be compromised.