GG News Bureau
New Delhi, 13th Nov. The Government of India has signed a $400 million loan agreement with the Asian Development Bank (ADB) to support its urban reform agenda. The loan aims to improve urban infrastructure, enhance service delivery, and promote efficient governance systems.
The signatories of the loan agreement for Sub-programme 2 of the Sustainable Urban Development and Service Delivery Programme were Ms. Juhi Mukherjee, Joint Secretary of the Department of Economic Affairs, Ministry of Finance, signing for the Government of India, and Takeo Konishi, Country Director of ADB’s India Resident Mission, signing for the ADB.
Sub-programme 1, approved in 2021 with a financing of $350 million, focused on establishing national-level policies and guidelines to improve urban services. Sub-programme 2, on the other hand, supports investment planning and reform actions at the state and urban local body (ULB) levels.
After signing the loan agreement, Ms. Mukherjee stated that the programme aligns with the Government of India’s urban sector strategy, which aims to create livable cities that drive economic growth through inclusive, resilient, and sustainable infrastructure.
Mr. Konishi added, “Sub-programme 2 supports the reforms initiated by the states and the ULBs in operationalizing the national flagship programme of Atal Mission for Rejuvenation and Urban Transformation (AMRUT) 2.0. This program aims to achieve universal access to water supply and sanitation. It also supports other mission objectives, such as reducing water losses, recycling treated sewage, rejuvenating water bodies, and maintaining sustainable groundwater levels.”
The programme also includes integrated urban planning reforms to control urban sprawls and promote planned urbanization. This involves implementing legal, regulatory, and institutional reforms, as well as capacity building of ULBs and community awareness. ULBs will focus on modernizing building bylaws, land pooling, urban agglomeration, and comprehensive urban mobility planning through transit-oriented development. These measures aim to transform cities into well-planned centers of economic growth. The planning processes will also prioritize climate and disaster resilience, nature-based solutions, and improvements in the urban environment. Additionally, the programme aims to enhance cities’ financial sustainability by generating additional revenues through reforms in property taxes, user charges, and expenditure rationalization.
The programme will incentivize cities to become creditworthy by implementing reforms that enhance their revenues, improve efficiency, and rationalize expenditures. This will enable cities to access innovative financing options, such as commercial borrowings, municipal bonds, sub-sovereign debts, and public-private partnerships, to bridge the investment gaps in urban infrastructure.
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