The loans will mostly assist the country’s expansion and improvements in Bhagalpur and Gaya towns in the state of Bihar.

Kenichi Yokoyama, country director of ADB’s Resident Mission, who signed the agreement on behalf of the bank, said the loan will support civil works subprojects and benefit 1.1 million people in the two towns with increased coverage of water supply by 2021.

It would also train 400 local staff in urban areas in the management, operation and maintenance of water supply systems and help improve technical and financial management of the water supply operations.

Sameer Kumar Khare, joint secretary at the Department of Economic Affairs, Ministry of Finance, said: “The Project 2 will improve access to a better quality water supply for the people of Bhagalpur and Gaya towns.

“It will also promote better water management practices that will result in citywide coverage with 24-hour uninterrupted supply of treated water of 135 litres per capita per day in both cities.”

India’s finance minister unveiled the “world’s largest healthcare programme” in a surprise move as part of the budget at the beginning of the month.

The government also proposed a 70% duty on solar equipment from China and Malaysia to protect its domestic industry from “serious injury”.