According to a finance ministry statement, India inked a $400 million policy-based loan deal with the Asian Development Bank (ADB) on Monday to construct high-quality urban infrastructure, improve service delivery, and promote efficient governance systems. The initiative also includes integrated planning changes to control urban sprawl and promote systemic and planned urbanization by improving the complete ecosystem of legal, regulatory, and institutional reforms.
The first sub-programme, approved in 2021 with a $350 million budget, developed national-level policies and guidelines to improve urban services, while the second sub-programme, approved in 2022 with a $350 million budget, supports investment planning and reform measures at the state and urban local body (ULB) levels.
Juhi Mukherjee, joint secretary, department of economic affairs, Ministry of Finance, and Takeo Konishi, country director of ADB's India resident mission, signed the loan agreement for sub-programme 2. Mukherjee stated that the plan complements the government's urban sector policy by focusing on changes targeted at making cities livable and centers of economic growth by providing 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," Konishi stated in a press release.
According to the announcement, the sub-programme also supports other mission objectives for ensuring urban water security by minimizing water losses, reusing treated sewage for non-domestic use, rejuvenating water bodies, and preserving sustainable groundwater levels.
ULBs will support the updating of construction rules, land pooling, urban agglomeration, and comprehensive urban mobility planning through transit-oriented development, aiding cities in becoming well-planned economic growth hubs. Climate and catastrophe resilience, the promotion of nature-based solutions, the development of the urban environment, and the financial sustainability of cities through additional income generation will all be part of such integrated planning procedures.
Cities will be incentivized to become creditworthy through a variety of changes aimed at increasing revenues such as property taxes and user fees, improving efficiency, and rationalizing spending.
According to a finance ministry statement, this will significantly assist cities in mobilizing innovative financing such as commercial borrowings, issuing of municipal bonds, sub sovereign debts, and public-private partnerships to bridge huge gaps in urban infrastructure spending.
