Union Cabinet has approved one lakh crore rupees for the Urban Challenge Fund

Union Cabinet has approved one lakh crore rupees for the Urban Challenge Fund

¨     Union Cabinet has approved one lakh crore rupees for the Urban Challenge Fund (UCF).

¨     The fund will leverage private participation and citizen-centric reforms to deliver high-quality urban infrastructure.

¨     The initiative is expected to make cities the key drivers of the country's economic growth.

¨     The Urban Challenge Fund (UCF) is a Centrally Sponsored Scheme of the Ministry of Housing and Urban Affairs.

¨     The aim of the fund is to build resilient, productive, inclusive and climate-responsive cities.

¨     The UCF will crowd-in private capital by making projects bankable.

¨     It will also achieve this capital by reducing risks for lenders and private partners.

¨     The Fund supports up to 25% of project cost, subject to raising a minimum of 50% of the project cost from the market.

¨     The operational period for the fund is from Financial Year 2025-26 to Financial Year 2030-31.

¨     Its implementation period is extendable up to the Financial Year 2033-34.

¨     This move is expected to result in a total investment of four lakh crore rupees in the urban sector in the next five years.

¨     This is also expected to mark a shift in India’s urban development approach from grant-based financing to outcome-oriented, market-linked and reform-driven infrastructure creation.