The Government is planning to set up an urban infrastructure fund to improve infrastructure in 63 cities. The Urban Development Ministry has already got the go ahead from the Finance Ministry’s Department of Economic Affairs. “We will now have to seek the Planning Commission’s approval,” Urban Development Ministry Secretary M Ramachandran said.

Sources said the World Bank has already committed $500 million as initial endowment for this fund. Efforts were on to get more financial institutions on board so that states and municipal bodies can got funds at concessional interest rates from this infrastructure fund.

The Government decided to go ahead with this fund as it found that the money required to fund the infrastructure projects in 63 cities — as per the XI Plan projections— is reaching about

Rs 2.5 lakh crore.

While Rs 1.27 lakh crore is needed to improve water supply, sewerage and sewage treatment, drainage and solid waste management, another Rs 1.3 lakh crore is needed for urban transport.

But, out of total Rs 2.5 lakh crore, only about Rs 40,000 crore will be available under the funds meant for the UPA Government’s flagship programme Jawaharlal Nehru National Urban Renewal Mission during the next five-year period.

The Urban Development Ministry, in a note submitted to the Planning Commission, has justified setting up this fund by painting a grim picture of urban India: 70 per cent urban households have taps and 21 have handpumps, 66 per cent get water at home while 32 get within 200 metres from home, 26 per cent don’t have lavatories, sewerage connections vary between 48 to 70 per cent and household waste is removed by families themselves in 70 per cent households.