Pro-Poor Urban Development Projects in Sri Lanka and India Showcase Blueprint for Inclusive Growth

Hadisur Rahman, Jadetimes Staff

H. Rahman is a Jadetimes news reporter covering Asia

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Image Source: The World Bank

As the world braces for a dramatic rise in urban population over the next two decades, well-planned urbanization is emerging as a key pillar of sustainable development. Two landmark initiatives the Local Development Support Project (LDSP) in Sri Lanka and the Uttar Pradesh Pro-Poor Tourism Development Project (UPPTDP) in India are demonstrating how investments in inclusion, basic services, and economic opportunity can transform urban and semi-urban landscapes, while also improving quality of life for the most vulnerable.

These projects, supported by the World Bank and development partners such as the European Union, have proven that inclusive and sustainable urban development is not just possible but replicable, offering a model for developing countries grappling with rising urbanization and regional inequality.

Sri Lanka’s Local Development Support Project: Local Solutions for Local Growth

In post-crisis Sri Lanka still recovering from the effects of a decades-long civil war and the COVID-19 pandemic development gains have eroded, particularly in the Northern, Eastern, Uva, and North Central Provinces, home to one-third of the country’s poor. To reverse this trend, the LDSP launched in 2019, targeting 134 local authorities across these four provinces.

Funded through a $50 million credit from the International Development Association (IDA) and a €20 million grant from the EU, LDSP’s approach centered on performance-based financing and community-driven development. More than 2,000 subprojects chosen through participatory planning have enhanced basic services like water supply, drainage, sanitation, and local roads. Notable achievements include:

• Over 1 million people benefited, including more than 600,000 women.

• 70 km of local roads and 8 km of drainage systems constructed.

• 100 solid waste management projects serving 7,300 households.

• 30 daycare centers and 34 rehabilitated health clinics established.

• 200 markets and 2,000 jobs created, many targeting women-headed households and youth.

• A jump from 37% to 63% in local authorities using ICT tools for revenue collection from 2022 to 2023.

Importantly, the project helped institutionalize a participatory development model and introduced performance-based funding that has since been adopted at the national level. A government program announced in December 2024 aims to expand this model to 54 more local authorities.

India’s Uttar Pradesh Tourism Project: Redefining Growth Through Culture and Inclusion

In 2016, the Indian state of Uttar Pradesh (UP) rich in religious and cultural heritage but home to widespread poverty faced a paradox. Though millions visited iconic sites like the Taj Mahal and Varanasi, local communities saw little benefit. The UP Pro-Poor Tourism Development Project, launched in 2018 with a $35 million IBRD loan, set out to change that.

With a three-pronged pro-poor approach developing whole destinations, maximizing local benefit, and catering to the domestic tourism market the project targeted heritage cities with strong tourism potential. Its results are striking:

• Nearly 16,000 individuals directly benefited, including over 7,400 women.

• Basic infrastructure was upgraded, including roads, water supply, and solid waste systems.

• Green walkways, vending zones, and improved signage enhanced tourist experiences and livability.

• More than 7,000 artisans and poor individuals received business development support.

• Over 2,800 jobs were created in the tourism value chain most filled by women.

• Nearly 5,700 craftspeople, including 4,369 women, organized into 561 Self Help Groups gained market access and financial independence.

The project’s success led the Uttar Pradesh government to integrate its model into the state’s 2024 Tourism Policy and launch a $340 million initiative to replicate it across the state.

While the Sri Lankan and Indian contexts differ, the core insight is the same: when local authorities and communities are empowered, development becomes more inclusive, impactful, and sustainable. Both projects show that even modest investments if targeted well and paired with strong community engagement can yield lasting economic and social returns.

“These initiatives are living proof that poverty reduction and urban resilience are achievable when we invest in people and institutions closest to the problems,” said a World Bank spokesperson.

The pro-poor tourism model has already influenced global thinking, serving as a strategic framework for post-COVID-19 tourism recovery around the world. Meanwhile, Sri Lanka’s use of performance-based funding is becoming a reference point for other fragile and conflict-affected regions.

As urbanization accelerates, these success stories from South Asia offer a compelling blueprint for building cities that are not only engines of economic growth but also bastions of equity and opportunity.