Calcutta, Jan. 29: The state cabinet today gave its approval for the formation of a fund to help municipalities implement development projects.

The primary objective of setting up the West Bengal Municipal Development Fund, with the help of the UK’s Department for International Development, is to provide soft loans at very low interest rates to civic bodies.

“Often, municipalities cannot start work because of shortage of funds. Now, they can take loans and kickstart their work at the earliest,” urban development minister Asok Bhattacharya said.

At the initial stage, the UK agency will provide Rs 82.67 crore and the state Rs 25.20 crore, the minister said.

The development projects will primarily include drinking water facilities, sewerage and drainage systems, construction of roads, truck or bus terminals and projects related to solid waste management, Bhattacharya said.

Bengal Infrastructure —the joint venture company of the government and Infrastructure Leasing and Financial Services Limited — will manage the fund, the minister said.

“The company will look after the fund. It will also see to it that the money is used properly by municipalities,” he added.

Andhra Pradesh, Maharashtra, Gujarat and Karnataka have similar funds. “We have followed the models of these states and hope that the municipalities will benefit from this fund and move ahead with their schemes and projects,” Bhattacharya said.