India will need $840 billion urban infra investment in 15 years, predicts World Bank

New Delhi: India will need to invest $840 billion into urban infrastructure in the next 15 years so that it can meet the needs of a fast-growing urban population. 600 million people will be living in urban areas of the country by 2036.

A World Bank report titled "Financing India's Infrastructure Needs: Constraints to Commercial Financing and Prospects for Policy Action" stressed the urgent need to leverage more private and commercial investments to meet emerging financial gaps, reported ANI.

A statement from the international body on Monday said the investment will put "additional pressure" on the already stretched urban infrastructure and services of Indian cities. The growing population will demand more clean drinking water, a reliable power supply, and better transport.

Roland White, the Global Lead of City Management and Finance at the World Bank, said that the government of India can play an important role in removing market frictions that cities face in accessing private financing.

The report observed that only 5% of the infrastructure needs are currently being financed by private sources. Since the government's current annual urban infrastructure investment is at $16 billion, it leaves much room for private financing in the next decade. The weak regulatory environment and revenue collection are also challenges. It recommended expanding the capacities of city agencies to deliver infrastructure projects at scale. The World Bank also suggested a series of structural reforms in the taxation policy and fiscal transfer system.

Auguste Tano Kouame, Country Director of World Bank, India, said Indian cities are in need of large amounts of financing to promote "green, smart, inclusive, and sustainable urbanization." "Creating a conducive environment for urban local bodies, especially large and creditworthy ones, to borrow more from private sources will therefore be critical to ensuring that cities are able to improve the living standards of their growing populations in a sustainable manner," said the official.