The Government of India has officially signed a $400 million policy-based loan agreement with the Asian Development Bank (ADB) to advance its urban reform agenda. This initiative aims to enhance urban infrastructure quality, elevate service delivery, and foster efficient governance systems.
Under the Sustainable Urban Development and Service Delivery Programme, Sub-programme 2 of this loan agreement focuses on supporting investment planning and reform actions at the state and urban local body (ULB) levels. The signatories to the agreement were Ms. Juhi Mukherjee, Joint Secretary of the Department of Economic Affairs, Ministry of Finance, representing the Government of India, and Takeo Konishi, Country Director of ADB’s India Resident Mission, representing ADB.
While Sub-programme 1, approved in 2021 with a financing of $350 million, concentrated on establishing national-level policies and guidelines to improve urban services, Sub-programme 2 takes a step further by supporting initiatives at the state and ULB levels.
After the signing, Ms. Mukherjee emphasized that the programme aligns with the Government of India’s urban sector strategy, focusing on reforms to create livable cities that serve as centers of economic growth through inclusive, resilient, and sustainable infrastructure provision.
Mr. Konishi noted that Sub-programme 2 specifically supports state and ULB reforms under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) 2.0. This includes objectives such as universal access to water supply and sanitation, reduction of water losses, recycling treated sewage for non-domestic use, water body rejuvenation, and maintaining sustainable groundwater levels.
The program also envisions integrated urban planning reforms to control urban sprawl and encourage planned urbanization. This involves legal, regulatory, and institutional reforms, along with capacity building of ULBs and community awareness. The focus is on modernizing building bylaws, land pooling, urban agglomeration, and comprehensive urban mobility planning through transit-oriented development. The goal is to transform cities into well-planned economic centers with integrated planning processes incorporating climate and disaster resilience, nature-based solutions, and improved urban environments.
Cities participating in the program will be encouraged to become creditworthy through revenue enhancement measures like property taxes and user charges. This, in turn, will improve efficiency, rationalize expenditures, and help mobilize innovative financing options such as commercial borrowings, municipal bonds, sub-sovereign debts, and public–private partnerships to address substantial deficits in urban infrastructure investments.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
