New Delhi, Apr 15 (PTI) Union minister Manohar Lal on Wednesday launched the operational guidelines for the Rs 1 lakh crore Urban Challenge Fund (UCF) under which the Centre’s contribution will be capped at 25 per cent of the total project cost, while states and urban local bodies will share a part of the remaining burden.
The minister also launched a Rs 5,000-crore Credit Repayment Guarantee Sub-Scheme (CRGSS), which will provide guarantee coverage for term loan assistance to urban local bodies for their projects taken up under UCF announced in last year’s budget.
According to UCF’s guidelines, at least 50 per cent of the funding is expected to be raised through market mechanisms such as municipal bonds, bank loans and public-private partnerships.
Out of the total outlay, Rs 90,000 crore has been earmarked for project implementation, while Rs 5,000 crore each has been set aside for project preparation and capacity building, and the credit guarantee sub-scheme.
The fund will be implemented with a total investment of Rs 4 lakh crore from FY 2025-26 to FY 2030-31, extendable by three years.
The minister said that in the next five to six months, the government will start releasing funds to states and ULBs.
The Union Housing and Urban Affairs Minister said that the Urban Challenge Fund will act as a catalyst to mobilise nearly four times the investment for urban development projects across the country.
Officials said this funding pattern is aimed at ensuring financial discipline, enhancing accountability and encouraging private sector participation in urban infrastructure projects.
The CRGSS is expected to benefit smaller cities, particularly those in Tier-II and Tier-III categories, as well as hilly and northeastern regions, by improving their access to market-based funding through credit guarantees. PTI BUN MR
This report is auto-generated from PTI news service. ThePrint holds no responsibility for its content.