India, ADB sign USD 400 mn loan to create quality urban infrastructure

After signing the loan agreement, Mukherjee stated that the programme supports the government of India's urban sector growth strategy

New Delhi: The central government has signed a USD 400 million policy-based loan with the Asian Development Bank (ADB) to support its urban reform agenda for creating high-quality urban infrastructure, improving service delivery, and promoting efficient governance systems.

The signatories to the loan agreement for sub-programme 2 of the ‘Sustainable Urban Development and Service Delivery Programme’ were Juhi Mukherjee, Joint Secretary, Department of Economic Affairs, Ministry of Finance, and Takeo Konishi, Country Director of ADB’s India Resident Mission.

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While sub-programme 1 approved in 2021 with a financing of USD 350 million established national-level policies and guidelines to improve urban services, sub-programme 2 is supporting investment planning and reform actions at the state and urban local body levels, an official release from the centre stated Monday evening.

After signing the loan agreement, Mukherjee stated that the programme supports the government of India’s urban sector growth strategy.

“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 to water supply and sanitation,” said Konishi of ADB.

“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 groundwater level.”

The programme 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.

Specifically, ULBs will promote the 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.

Moreover, cities will be incentivised to become creditworthy through various reforms on enhancing their revenues such as property taxes and user charges, improving their efficiencies and rationalising their expenditures.

The government believes that it will substantially help cities to mobilise innovative financings such as commercial borrowings, issuance of municipal bonds, and public-private partnerships to bridge significant deficits in urban infrastructure investments.