Delhi Water Minister Kapil Mishra announced the decision after a meeting with North Delhi Mayor Ravinder Gupta. Environmentalists and local residents have over the years raised serious concerns over the situation of the "dying" lake.
"In the meeting, it was decided to rejuvenate the Naini Lake, a dead water body located in the Model Town locality. Delhi Tourism department will work to rejuvenate, conserve and revive the Naini Lake for boating and other such supporting activities," the government said.
North Delhi Municipal Corporation grants license for boating and related activities on a revenue-sharing model with Delhi Tourism and Transportation Development Corporation.
The agreement, thus, is also likely to provide a much-needed impetus to tourism in the lake.
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Naini Lake, which had housed a variety of flora and fauna at one point, has ecologically degraded in recent years. The water level of the lake is at an all-time low while its depth has also reduced by a good 15 metres.
Since last month, the local youth have also been using social media to mobilise support for the cause.