ASIAN DEVELOPMENT BANK APPROVES $400 MILLION LOAN TO INDIA FOR SUSTAINABLE URBAN DEVELOPMENT PROGRAM
The Asian Development Bank (ADB) has greenlit a $400 million policy-based loan to India for Subprogram 2 of the Sustainable Urban Development and Service Delivery Program. The program is designed to bolster the government’s urban reform agenda, aiming to enhance the quality of urban life through the development of high-quality urban infrastructure, reliable public services, and efficient governance systems.
While Subprogram 1, approved in 2021, focused on establishing national-level policies and guidelines to improve urban services, Subprogram 2 will concentrate on supporting investment planning and reform actions at the state and urban local body (ULB) levels.
“India has recognized the potential for cities to be centers of economic growth and has emphasized the need to make cities livable through inclusive, resilient, and sustainable infrastructure, which is also in line with ADB Strategy 2030,” remarked ADB Principal Urban Development Specialist Sanjay Joshi. “The national flagship program of Atal Mission for Rejuvenation and Urban Transformation (AMRUT) 2.0 is targeted for universal access to water supply and sanitation and to ensure urban water security through reducing water losses, recycling treated sewage for non-domestic use, rejuvenation of water bodies, and maintaining sustainable groundwater levels.”
The program envisions integrated urban planning reforms to control urban sprawls and foster systemic and planned urbanization. This involves enhancing the entire ecosystem of legal, regulatory, and institutional reforms along with capacity building of ULBs and community awareness. ULBs will play a crucial role in modernizing building bylaws, land pooling, urban agglomeration, and comprehensive urban mobility planning through transit-oriented development.
In addition, the program will incentivize cities to become creditworthy through various reforms aimed at enhancing their revenues, such as property taxes and user charges. It will also focus on improving efficiencies and rationalizing expenditures to help cities mobilize innovative financing, including commercial borrowings, issuance of municipal bonds, subsovereign debts, and public–private partnerships.
ADB will provide knowledge and advisory support to the Ministry of Housing and Urban Affairs in program implementation, with a particular focus on lower-income states requiring assistance in capacity building, institutional strengthening, and policy reforms.
