This paper deals with transformation of early rural settlements to urban centers and growth of urbanization in India. Its effects on urban energy demand and the consequent energy-related problems at cities are discussed. We have highlighted the failure of the urban improvement programs to tackle the urban problems on a long-term basis and analyzed the reasons for ambiguity in deciding about remedial strategies. Different perspectives on the performance of urban growth are explained that must be taken care of to formulate concrete policy measures for system improvement.