ADB Approves $400 Million Loan to Boost India’s Urban Infrastructure

Bank Nifty

October 25, 2023

New Delhi, India

Asian Development Bank(ADB)

Asian Development Bank (ADB) has approved a substantial $400 million loan to bolster India’s urban infrastructure, as part of the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) 2.0 initiative.

Supporting India’s Urban Growth

In a significant move, ADB is backing India’s commitment to enhancing urban life by improving urban infrastructure, ensuring reliable public services, and streamlining governance systems. This loan is policy-based, and designed to support reforms and investments at the state and urban local body levels.

Water Security and Integrated Planning

AMRUT 2.0, a national flagship program, aims to make Indian cities ‘water secure.’ This comprehensive initiative focuses on offering affordable water and sanitation services, advancing functional tap connections, and promoting water conservation. It also emphasizes integrated urban planning reforms to control urban sprawl and foster planned urbanization.

Revenue-Centric Reforms

ADB expects Indian cities to become credit-worthy by implementing revenue-centric reforms such as property taxes and user charges. These measures are vital to improve financial efficiencies and rationalize expenditures. They will allow cities to mobilize innovative financing options like municipal bonds and public-private partnerships to bridge the significant gap in urban infrastructure investments.

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Inclusivity and Sustainability

Sanjay Joshi, ADB’s Principal Urban Development Specialist, stressed that India recognizes the potential for cities to be engines of economic growth. The focus is on making cities inclusive, resilient, and sustainable, aligning with ADB’s Strategy 2030.

“India has recognized the potential for cities to be centres 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,” said Sanjay Joshi, ADB’s principal urban development specialist.

“The national flagship program of Atal Mission for Rejuvenation and Urban Transformation (AMRUT) 2.0 is targeted for universal access of 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,” Joshi added.

Equitable Development

ADB’s support extends to lower-income states, where capacity building, institutional strengthening, and policy reforms will be crucial to ensure that all regions benefit from urban development initiatives.

To conclude, Asian Development Bank(ADB’s) approval of a $400 million loan is a significant step in supporting India’s urban development goals. It reflects a broader strategy to enhance infrastructure, improve urban living conditions, and make cities more sustainable and inclusive. This loan is a crucial part of AMRUT 2.0, focusing on water security, integrated planning, and revenue-centric reforms to bridge the urban infrastructure investment gap, with a strong emphasis on equitable development.

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