Availability of land is a big challenge and has become a big debate in the country, he said at a conference here on sustainable and inclusive urbanisation.
"If you want to build new cities, you need land and also large spaces are required for businesses to flourish and for that you need spaces within the existing cities," he said.
"By all estimates that I have seen, it will easily take about up to 5 years for any acquisition of land to construct a city or something like that. That I am assuming that every step goes in smooth process without any challenges from NGOs, either judicial one or any kind of protest. So procedurally, it is a difficult Act," Panagariya said.
The horizontal space is also scarce, he said, adding that one way to overcome this space problem is to construct vertically but there are issues with that as well.
He said Indian cities have chosen a policy of low floor space index (FSI) and which have resulted in high rentals.
"You also need orderly urbanisation. Rapid moving transport and dense network of transport is needed so that people can reach desired place in a smooth manner. It also allows people to live in larger spaces outside the main city," he added.
On growth prospect, he said India has the potential to hit double digit growth.
"I have been arguing that India is poised for very rapid growth. Current growth rate is 7.5 per cent. I expect it to rise to 8-9 per cent. May be we can hit the double digit also," he said.
That, Panagariya said, would mean faster transformation, faster urbanisation and greater prosperity and rapid elimination of poverty.
Urban Development Minister Venkaiah Naidu, who was also present in the event launched the Swachh Bharat e-Learning Portal and the First Training Modules on Sanitation.
The platform will facilitate capacity building of municipal employees and those linked to the field of sanitation and solid waste management.
Naidu said the government has met as many as 98 entries for 100 smart cities and the rest of the two are expected to come in a few days.

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