ADB Extends $400 Billion Loan to India for its Urban Development

The Indian government will receive a $400-million "policy-based loan" from the Asian Development Bank (ADB) to aid its urban reform agenda. The funds will help in developing quality urban infrastructure, enhancing service delivery, and fostering efficient governance systems, stated the finance ministry. Juhi Mukherjee, joint secretary of the Department of Economic Affairs within the Ministry of Finance, and Takeo Konishi, country director of the ADB’s India resident mission, signed the loan agreement for sub-program 2.

Following the approval of the $350 million financing for Sub-programme 1 in 2021, which established national-level policies and guidelines to improve urban services, this loan is allocated for Sub-programme 2.

Following the signing ceremony, Mukherjee emphasized how the program is in line with the Government of India's urban sector development strategy, which prioritizes reforms to create more livable and economically vibrant cities through sustainable infrastructure.

He also observed that the program focuses on urban water security, with a strong emphasis on reducing water wastage, recycling sewage, revitalizing water sources, and preserving sustainable groundwater levels.

The program aims to make significant changes to urban planning in order to reduce urban sprawl and encourage well-organized urbanization. This will involve implementing legal, regulatory, and institutional reforms, as well as building the capacity of Urban Local Bodies (ULBs) and increasing community awareness. The goal is to update building regulations, promote land pooling, support urban growth, and develop urban transportation around transit-oriented developments. These measures will strengthen cities in preparation for climate change and disasters, introduce natural solutions, and improve urban environments.