In 1958, the government of Mumbai appointed a study group under the chairmanship of S. G. Barve, Secretary of the Public Works Department, to consider the problems of traffic congestion, deficiency of open spaces and playing fields, housing shortages, and over-concentration of industry in the metropolitan and suburban areas of the city and to recommend specific measures to deal with these.

The government of Maharashtra accepted the Barve group's recommendation to examine metropolitan problems in a regional context.

In March 1965, the government appointed another committee chaired by Prof. D. R. Gadgil, then-director of the Gokhale Institute of Politics and Economics, Pune.

The Gadgil committee also recommended a planned decentralisation of industrial growth in the Mumbai region, as well as the development of the mainland area as a multi-nucleated settlement.

These multi-nucleated settlements, each 250,000 in population, were proposed as a series of nodes strung out along mass transit axes, self-contained, with respect to schools, commerce and other essential services, and separated from each other by green spaces.

By February 1970, the government notified for acquisition of privately owned land covering 86 villages and measuring 159.54 km2 within the present limits of Navi Mumbai.

The corporation started functioning as a company fully owned by the state government with initial subscribed capital of Rs.

The 1991 census recorded a 10% decrease in population growth rate for greater Mumbai, compared to the previous decade.

It aims to prevent population influx into Mumbai, diverting it to the new town, by providing an urban alternative which will lure citizens wishing to relocate to a city of peace and comfort.

Immigrants are to be absorbed from other states and efficient and rational distribution of industries is promoted by preparing a ground for them who otherwise could have opted for Mumbai.

CIDCO plans to provide basic civic amenities to all and elevate standards of living for people of all social and economic strata.

Moreover, it wants to offer a healthy environment and energizing atmosphere in order to utilize human resources at their fullest potentials.

It has built a stock of houses supported by social infrastructure such as community centres, markets, parks, education institutes, and playgrounds.