The Government of India has inked a $400 million policy-based loan agreement with the Asian Development Bank (ADB). This financial collaboration is intended to bolster India’s urban reform agenda, focusing on the development of high-quality urban infrastructure, enhancing service delivery, and fostering efficient governance systems.
Sub-programme 1, approved in 2021 with a financing of $350 million, laid the foundation by establishing national-level policies and guidelines aimed at enhancing urban services. On the other hand, Sub-programme 2 is geared towards supporting investment planning and implementing reform actions at both the state and urban local body (ULB) levels.
Juhi Mukherjee, Joint Secretary from the Department of Economic Affairs, Ministry of Finance, signed on behalf of the Government of India, while Takeo Konishi, the Country Director of ADB’s India Resident Mission, signed on behalf of the Asian Development Bank. They were the signatories for the loan agreement pertaining to Sub-programme 2 of the Sustainable Urban Development and Service Delivery Programme.
After signing the loan agreement, Mukherjee stated, ‘The programme supports the Government of India’s urban sector strategy with a focus on urban reforms aimed at making cities livable and centres of economic growth through provisioning of inclusive, resilient and sustainable infrastructure.’
‘Sub-programme 2 supports the reforms initiated by the states and the ULBs in operationalising the national flagship programme of Atal Mission for Rejuvenation and Urban Transformation (AMRUT) 2.0 targeted for universal access of water supply and sanitation,’ said Konishi.
‘The sub-programme also supports other mission objectives for ensuring urban water security through reducing water losses, recycling treated sewage for non-domestic use, rejuvenation of water bodies, and maintaining sustainable ground water level.’
About the Programme
- It also envisages integrated urban planning reforms to control urban sprawls and foster systemic and planned urbanisation through enhancing the entire ecosystem of legal, regulatory, and institutional reforms along with capacity building of ULBs and community awareness.
- ULBs will promote modernisation of building bylaws, land pooling, urban agglomeration, and comprehensive urban mobility planning through transit-oriented development to help cities become well-planned centres of economic growth.
- Such integrated planning processes will incorporate climate and disaster resilience, promote nature-based solutions, improve urban environment, and improve cities’ financial sustainability through generation of additional revenues.
- Moreover, cities will be incentivised to become creditworthy through various reforms on enhancing their revenues such as property taxes and user charges, improve their efficiencies and rationalize their expenditures.
- This will substantially help cities to mobilise innovative financing such as commercial borrowings, issuance of municipal bonds, sub sovereign debts, and public–private partnerships to bridge significant deficits in urban infrastructure investments.
