India's big cities are facing a burgeoning housing crisis amid a swelling population as the country is set to overtake China by 2027 to become the most populous country in the world, according to a United Nations report.

The country's most populous state, Uttar Pradesh, has proposed legislation that aims to discourage couples from having more than two children, becoming the second state ruled by Prime Minister Narendra Modi's party to make such a proposal.

Under the state government proposals unveiled on Saturday, couples with more than two children would not be allowed to receive government benefits or subsidies and would be barred from applying for state government jobs.

The bill says that because of the state's "limited ecological and economic resources at hand, it is necessary and urgent that the provision of the basic necessities of human life are accessible to all citizen".

-Reuters