The Indian government has signed a loan agreement worth USD 400 million with the Asian Development Bank (ADB) to boost its urban reform agenda. The primary aim of this funding is to improve the quality of urban infrastructure, enhance service delivery, and promote efficient governance systems. Sub-programme 2 of the Sustainable Urban Development and Service Delivery Program agreement was signed by Juhi Mukherjee, Joint Secretary of the Department of Economic Affairs, and Takeo Konishi, Country Director of ADB's India Resident Mission. The first sub-program, which was approved in 2021 with a financing of USD 350 million, established national-level policies and guidelines to improve urban services. Sub-program 2 will support investment planning and reform actions at the state and urban local body (ULB) levels to further improve the urban infrastructure.

Juhi Mukherjee stated that the program is in line with the government's urban sector strategy, which emphasizes reforms aimed at making cities more livable and promoting economic growth through inclusive, resilient, and sustainable infrastructure. Sub-programme 2 supports the reforms initiated by states and ULBs and aligns with the national flagship program Atal Mission for Rejuvenation and Urban Transformation (AMRUT) 2.0, which focuses on providing universal access to water supply and sanitation. The program also focuses on ensuring urban water security, promoting water conservation, recycling treated sewage, rejuvenating water bodies, and maintaining sustainable groundwater levels.

The initiative aims to reform urban planning by implementing legal, regulatory, and institutional changes that will control urban sprawl and promote planned urbanization. It also includes community awareness and capacity building of Urban Local Bodies (ULBs). The strategy involves ULBs promoting the modernization of building bylaws, land pooling, comprehensive urban mobility planning through transit-oriented development, and urban agglomeration. This all contributes to transforming cities into well-planned centers of economic growth.

The planning processes will prioritize climate and disaster resilience, nature-based solutions, improved urban environments, and enhanced financial sustainability for cities. To achieve this, cities will be incentivized to become creditworthy through reforms aimed at boosting revenues, such as property taxes and user charges. These measures will enable cities to mobilize innovative financing avenues, including commercial borrowings, municipal bonds, sub-sovereign debts, and public-private partnerships. This multifaceted approach aims to address significant deficits in urban infrastructure investments.