Programme Overview

India is currently navigating a period of rapid but uneven urbanization, with projections indicating that over 600 million people will be in cities in the next few years, even as the pace of change varies across different states and urban regions. Regardless, this process requires an estimated investment of almost a trillion dollars, according to estimates, into urban infrastructure such as water supply, the management of waste, and building climate resilience over the next two decades.

Indian Urban Local Bodies (ULBs) have historically relied heavily on grants and state subsidies, which currently account for the majority of urban capex. However, this model is shifting toward self-reliance and fiscal decentralization. In this context, some important reforms are as follows:

• Own-Source Revenue: Enhancing property tax collection through GIS mapping and digital automation to improve the creditworthiness of cities.
• Innovative Financing: Moving toward ‘bankable projects’ by leveraging Municipal Bonds, Public-Private Partnerships (PPPs), and the Urban Challenge Fund, which provides 25% of project costs if the remainder is sourced from commercial loans or bonds.
• Institutional Readiness: Strengthening ULB capacity for project conceptualization, management, and auditing.

As the 16th Finance Commission takes effect, the focus is increasingly on performance-linked grants and the development of Tier 2 and Tier 3 cities as regional economic hubs through initiatives like the Urban Infrastructure Development Fund (UIDF) and Urban Challenge Fund (UCF). This course will take participants through the key practical aspects of these developments, focusing on the different tools to finance and track projects.

Programme Objective

• To develop an understanding of urban financing as ULBs move from grant funding to performance linked funding and entrepreneurial practice
• To become familiar with methods for own-source revenue through tools like tax reform, land monetization, value capture mechanism, etc.
• To learn how to structure projects and map risks for incentivising private capital for urban infrastructure through PPPs
• To understand how to leverage new sources of urban financing such as municipal bonds, green bonds and the Urban Challenge Fund (UCF)