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Financing India’s Urban Infrastructure : World bank

Financing India’s Urban Infrastructure : World bank


The report, titled “Financing India’s Urban Infrastructure Needs: Constraints to Commercial Financing and Prospects for Policy Action” was released by the World bank.

  • The report underlines the urgent need to leverage more private and commercial investments to meet emerging financial gaps.

Highlights of the Report:

  • India will need to invest USD 840 billion over the next 15 years into urban infrastructure if it is to effectively meet the needs of its fast-growing urban population.
  • By 2036, 600 million people will be living in urban cities in India, representing 40% of the population.
  • This is likely to put additional pressure on the already stretched urban infrastructure and services of Indian cities – with more demand for clean drinking water, reliable power supply, efficient and safe road transport amongst others.
  • Currently, the central and state governments finance over 75% of city infrastructure, while Urban Local Bodies (ULB) finance 15% through their own surplus revenues.
  • Only 5% of the infrastructure needs of Indian cities are currently being financed through private sources.
  • There has also been slow implementation performance by states and Urban Local Bodies (ULBs) on several of the Centre’s flagship Urban Missions such as the Smart Cities Mission (SCM) and the Pradhan Mantri Awas Yojana (PMAY) for instance— due to constraints on implementation capacity at the city level.
  • ULBs across India have so far executed only about one-fifth of the cumulative cost or outlay of approved projects under SCM and Atal Mission for Rejuvenation and Urban Transformation (AMRUT) over the last six financial years.
  • Public Private Partnership (PPP) transactions for urban infrastructure in India registered a marked decline in the last decade both in monetary value and transaction volume— 124 PPP projects have been awarded in the urban sector since the year 2000 worth a total cost of USD5.5 billion.
  • However, PPP project awards have declined substantially after a “brief but substantial spike” between the years 2007 and 2012 when most of these projects were awarded.
  • Only one-third of all PPP investments awarded since 2000 came in the last decade including 55 projects worth USD17 billion,