Tatsat Chronicle Magazine

India, ADB Sign $350 Million Loan to Improve Access to Urban Services in India

The MoU will support access to water supply, sanitation and affordable rental housing, especially serving the poor most affected by COVID-19, said Takeo Konishi, Country Director, ADB’s India Resident Mission
December 21, 2021
Urban Services in India

The Government of India and the Asian Development Bank (ADB) have signed a $350 million policy-based 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 program 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,” said Takeo Konishi, Country Director of ADB’s India Resident Mission.

Rajat Kumar Mishra, Additional Secretary, Department of Economic Affairs signed the loan agreement with Takeo Konishi, Country Director of ADB’s India Resident Mission for the first subprogram of $350 million under the Sustainable Urban Development and Service Delivery Program.

The first subprogram will establish essential policies and guidelines for urban reforms at the national level followed by specific reform actions and program proposals at the state and ULB-level under the second subprogram. Rajat Kumar Mishra said that the programme is aligned with the Government of India’s 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.

The outcomes of the programme will be achieved with support to Atal Mission for Rejuvenation and Urban Transformation (AMRUT) 2.0 that envisages accelerated universal access of piped water supply and sanitation, and the Pradhan Mantri Awas Yojana that aims to provide affordable housing to all, including poor, urban migrant and industrial workers. The programme will also promote performance-based central fiscal transfers to ULBs on the recommendations of the 15th Finance Commission by linking fiscal transfers to improved urban service delivery. This will help boost local financial resource generation in ULBs resulting in improved urban governance.

ADB will provide knowledge and advisory support to the Ministry of Housing and Urban Affairs in programme implementation, including monitoring and evaluation. It will also support ULBs, 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.