New Delhi: The central government recently inked a USD 400 million policy-based loan agreement with the Asian Development Bank (ADB) headquartered in Manila in order to bolster the government’s urban reform agenda, fostering the development of high-quality urban infrastructure, enhancing service delivery, and advancing efficient governance systems.
Juhi Mukherjee, Joint Secretary of the Department of Economic Affairs, and Takeo Konishi, Country Director of ADB’s India Resident Mission, were the signatories to the loan agreement for Sub-programme 2 of the Sustainable Urban Development and Service Delivery Programme.
The first sub-programme, approved in 2021 with a financing of USD 350 million, laid the groundwork by establishing national-level policies and guidelines to enhance urban services. Sub-programme 2 focuses on supporting investment planning and reform actions at the state and urban local body (ULB) levels, according to a statement from the finance ministry.
Juhi Mukherjee emphasised that the program aligns with the government’s urban sector strategy, concentrating on reforms to make cities liveable and centres of economic growth with inclusive, resilient, and sustainable infrastructure.
Konishi highlighted that Sub-programme 2 backs the reforms initiated by states and ULBs in operationalising the national flagship program Atal Mission for Rejuvenation and Urban Transformation (AMRUT) 2.0.
This program targets universal access to water supply and sanitation and supports additional mission objectives, including urban water security measures such as reducing water losses, recycling treated sewage, rejuvenating water bodies, and maintaining sustainable groundwater levels.
Furthermore, the program envisions integrated urban planning reforms to control urban sprawls and foster planned urbanisation by enhancing legal, regulatory, and institutional frameworks. Capacity building of ULBs and community awareness is also part of the plan.
ULBs, specifically, will drive modernisation efforts in building bylaws, land pooling, urban agglomeration, and comprehensive urban mobility planning, promoting transit-oriented development to create well-planned economic centres, as stated by the ministry.
The integrated planning processes will incorporate climate and disaster resilience, nature-based solutions, and improvements in the urban environment. Additionally, the initiative aims to enhance cities’ financial sustainability by generating additional revenues.
Cities will be incentivised to become creditworthy through reforms such as enhancing property taxes, user charges, improving efficiency, and rationalising expenditures.
These measures are anticipated to empower cities to mobilise innovative financing, including commercial borrowings, municipal bonds issuance, sub-sovereign debts, and public-private partnerships, thereby addressing significant deficits in urban infrastructure investments.
