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India And ADB Ink $400 Million Deal For Urban Infrastructure Development


India has taken a significant step towards the development of high-quality urban infrastructure with the signing of a $400 million policy-based loan agreement with the Asian Development Bank (ADB). The agreement, aimed at improving service delivery and promoting efficient governance systems, underscores the nation’s commitment to fostering planned and sustainable urbanization.

Building Foundations with $350 Million Financing in 2021

  • The first sub-programme, approved in 2021 with a financing of $350 million, laid the foundation for national-level policies and guidelines.
  • These policies are designed to enhance urban services, addressing critical aspects of urban planning and service delivery.
  • The emphasis is on creating a framework that supports systemic reforms for better urban living.

State and ULB Investment Planning and Reform Actions

  • The latest sub-programme, supported by the $400 million loan agreement, focuses on investment planning and reform actions at the state and urban local body (ULB) levels.
  • The agreement for this sub-programme was recently signed between Juhi Mukherjee, Joint Secretary of the Department of Economic Affairs, Ministry of Finance, and Takeo Konishi, Country Director of ADB’s India Resident Mission.

Strategic Alignment with Government’s Urban Sector Strategy

  • The programme aligns with the government’s urban sector strategy, emphasizing reforms that aim to make cities livable and centers of economic growth.
  • The focus is on inclusive, resilient, and sustainable infrastructure development that transforms urban areas into vibrant economic hubs.

Support for Atal Mission for Rejuvenation and Urban Transformation (AMRUT) 2.0

  • Sub-programme 2 actively supports the initiatives of states and ULBs in operationalizing the national flagship programme, Atal Mission for Rejuvenation and Urban Transformation (AMRUT) 2.0.
  • This program aims at achieving universal access to water supply and sanitation, crucial for ensuring the well-being of urban populations.

Ensuring Urban Water Security and Sustainable Practices

  • The sub-programme places a strong emphasis on urban water security through measures such as reducing water losses, recycling treated sewage for non-domestic use, rejuvenating water bodies, and maintaining sustainable groundwater levels.
  • These actions contribute to the broader goal of sustainable and resilient urban development.

Promoting Modernization and Comprehensive Planning

  • Urban Local Bodies (ULBs) will play a crucial role in promoting modernization of building bylaws, land pooling, urban agglomeration, and comprehensive urban mobility planning.
  • The aim is to transform cities into well-planned centers of economic growth, integrating climate and disaster resilience, nature-based solutions, and improvements to the urban environment.

Financial Sustainability and Innovative Financing

  • The program incentivizes cities to become financially sustainable by enhancing their creditworthiness through reforms in property taxes, user charges, and expenditure rationalization.
  • This, in turn, will enable cities to explore innovative financing options such as commercial borrowings, municipal bonds, sub-sovereign debts, and public–private partnerships to bridge significant deficits in urban infrastructure investments.

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