ADB to provide $350 million loan to improve urban services in India

The Asian Development Bank will provide $350 million loan to improve access to urban services in India by accelerating policy actions and reforms to enhance service delivery

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The Asian Development Bank (ADB) will provide USD 350 million loan to improve access to urban services in India by accelerating policy actions and reforms to enhance service delivery and promote performance-based central fiscal transfers to urban local bodies (ULBs).

The ADB will provide knowledge and advisory support to the Ministry of Housing and Urban Affairs in programme implementation, including monitoring and evaluation, the multi-lateral agency said in a statement.

It will also support urban local bodies particularly in select low-income states to implement policy reforms, prepare investment plans, and provide recommendations on cross-cutting issues like climate change, environmental and social safeguards assessment, and gender equality and social inclusion.

Rajat Kumar Mishra, Additional Secretary in the finance ministry signed the loan agreement for the first sub-programme of USD 350 million under Sustainable Urban Development and Service Delivery Programme while Takeo Konishi, Country Director of ADB's India Resident Mission, signed for ADB.

The first sub-programme will establish essential policies and guidelines for urban reforms at the national level followed by specific reform actions and programme proposals at the state and ULB-level under second sub-programme.

After signing the agreement, Mishra stated that the programme is aligned with the government national flagship programmes that promote cities as engines of economic growth by improving the quality of urban life through the creation of high-quality urban infrastructure, assured service provisions, and efficient governance.

Konishi said the programme builds upon ADB's long engagement with India in the urban sector with continued support to the central and state governments to undertake reforms to ensure universal and improved access to basic urban services such as water supply, sanitation, and affordable rental housing, especially for the poor most affected by the Covid-19 pandemic.

The ADB said with increasing urbanization, cities are expected to become a strong engine of growth for Indiagenerating economic activity and outputs, creating jobs for a significant volume of workers, improving competitiveness and urban livability, and protecting the environment.