He asked the funding agencies to accord priority to areas such as affordable housing, basic urban infrastructure, solid waste management, environment-friendly public transport and skill development.
The housing and urban poverty alleviation minister said that this would enable equitable sharing of public spaces and opportunities in urban areas.
The minister was delivering the 'Presidential Address' at the Plenary Session of the Governing Council of UN-Habitat in Nairobi, Kenya today.
On May 8, India was unanimously elected as the president of the UN-Habitat, an organ of the United Nations promoting sustainable human settlements across the globe.
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Naidu, in his speech, also laid stress on the need for collective actions by the global community to take forward the New Urban Agenda which sets a global standard for sustainable urban development.
The agenda was adopted at Quito, Ecuador last year.
The minister suggested a five-point strategy to improve urban governance at the local level.
He pitched for decentralisation of decision-making; devolution of functions and funds to urban local bodies; administrative and financial reforms; augmenting resource collection and enhanced citizen participation for effective functioning of urban local bodies.