World Bank had suspended disbursement of funds to Mumbai in March demanding rehabilitation of the affected people. Since then, the bank and the state government have been in talks to resolve the matter.
MUTP is an ambitious road and rail renewal plan which seeks to improve transportation in the traffic-choked mega city of Mumbai.
It involves the involuntary resettlement of more than 17,000 households and 2,500 shops and small industrial units. About 14,000 households have already been moved to secure dwellings.
The MUTP is supported by an International Bank for Reconstruction and Development loan of $463 million for the road and rail components of the project and an International Development Association credit of $79 million for resettlement. IBRD and IDA are two arms of World Bank.
"We have been working closely with the government of Maharashtra over the last few months to address the issues that led to the suspension of disbursements, especially in respect of the grievance process, resettlement and post resettlement services," Michael Carter, country director, World Bank, said. "Good progress has been made in each of these areas," he added.