According to an official statement, while Uttarakhand has made significant strides in piloting and implementing innovative approaches in water supply and sanitation services, the peri-urban areas have not been a focus.
From 2001 to 2011, the state's urban population grew by nearly 42 per cent, which is substantially higher than the national average of 32 per cent, it added.
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Joint secretary in the ministry of finance, Sameer Kumar Khare said that over 700,000 people residing in peri-urban areas of the state are expected to benefit from the programme.
It will help the state increase water supply coverage as well as ensure sustainable service delivery, the statement said.
It observed that growth and urbanisation have led to the rise of significant 'peri-urban' areas (mostly in the plains) that, while classified as rural, are effectively urban in nature.