New Delhi: With just three months left for the 2023-24 financial year to end, the Centre has received proposals worth approximately just Rs 650 crore under the Rs 10,000 crore Urban Infrastructure Development Fund (UIDF), ThePrint has learnt.
Announced as part of the 2023-24 Union Budget in February, the project was rolled out in July. At the time, states were given a September deadline to submit proposals to avail funds under the scheme. But sources in the — Ministry of Housing and Urban Affairs which is co-piloting the project with the Ministry of Finance — told ThePrint that till the first week of December, only eight states —Rajasthan, Tamil Nadu, Telangana, Goa, Haryana, Chhattisgarh, Tripura and Assam — have submitted proposals, worth roughly Rs 650 crore.
The total worth of projects sanctioned under the scheme is even less — close to Rs 250 crore, or less than five percent of the project funds, the sources added.
“The states were asked to submit detailed project reports (DPRs) to avail of the fund. Around 48 proposals have been received from eight states worth Rs 650 crore till the first week of December. Of this,12 projects worth Rs 200-250 crore have been sanctioned so far,” a senior ministry official told ThePrint.
The official told ThePrint that the reason for the receipt of few proposals was that the UIDF guidelines were issued only in July and the “evaluation process of proposals takes time”.
Talking about the time lag between the announcement of the project and its rollout, a second officer in the ministry defended it, saying, “There was no delay; it is the first time the fund has been announced for the urban sector. It takes time to finalise the norms.”
Asked if the funds sanctioned for 2023-24 would lapse at the end of the financial year if more projects are not sanctioned in the remaining three months, the first official said “states still have a lot of time to apply”.
The official explained that while initially a September deadline had been fixed for submission of proposals, it was decided to accept proposals as and when submitted by the states. “Funds [for 2023-24] will be released to proposals which are sanctioned till 31 March,” the official added.
In an email response to ThePrint’s query on funds utilisation under the scheme, the Finance Ministry said the Ministry of Housing and Urban Affairs was the nodal ministry for UIDF.
ThePrint has also reached the Ministry of Housing and Urban Affairs on WhatsApp for an official comment on the project. This report will be updated if and when a response is received.
Modelled on the Rural Infrastructure Development Fund (RIDF) created in 1995-96, the UIDF aims to help create urban infrastructure to bridge the gap in essential services in Tier-2 and Tier-3 cities and allows for an annual allocation of Rs 10,000 crore.
Guidelines from the National Housing Bank (NHB), India’s apex financial institution for housing (under the Union Ministry of Finance), which is the nodal implementation agency for the scheme, define Tier-2 cities as those with a population ranging between 1,00,000 and 99,99,999 and Tier-3 cities as those with a populating of 50,000 to 99,999.
Officials from the Ministry of Housing and Urban Affairs told ThePrint that proposals for just 48 projects had been received till the first week of December. These range from the setting up of water treatment plants to the development or upgrading of cremation grounds.
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‘A lengthy process’
According to the first ministry official quoted above, “As projects [under UIDF] are to be carried out by urban local bodies, the states have to first identify the projects, assess the requirement for funds [as it is provided as a loan], prepare detailed project reports, etc.”
As the fund is a loan given to state governments, states will have to assess how much loan they are willing to take. While the states’ urban development departments are preparing the proposals in consultation with urban local bodies, it is the finance departments that will approve the projects for submission, said senior officials in state governments ThePrint spoke to.
The Ministry of Housing and Urban Affairs official added: “It is a lengthy process. The technical committee at NHB then evaluates these projects.”
Under the UIDF guidelines, states have to submit detailed project reports of the proposed projects to avail the fund.
Officials in Uttrakhand, Uttar Pradesh (UP), Chhattisgarh, Haryana and Telangana told ThePrint that identifying the projects and preparing DPR is taking time, as it has to be done in consultation with city administrations.
Of these states, while Haryana and Telangana have sent some project proposals, Uttarakhand and UP are yet to submit any.
“The guidelines clearly mention the types of projects that can be undertaken. A lot of projects are already being carried out using the central government and state government funding. It took some time to identify the project [that could be undertaken under UIDF] as we had to identify the cities and discuss the projects with them,” said a senior official in UP government.
According to the UP government official, the state plans to construct stormwater drains in some states using funds received under UIDF. “We will soon submit the proposal for eight-nine cities,” the official added.
In Uttarakhand, proposals worth Rs 92 crore have been identified, said a state government official. “The proposals have been sent to the finance department for approval,” the state official added.
Bridging infrastructure gap in tier 2 & 3 cities
In several Tier 2 and 3 cities, state officials ThePrint spoke to said basic infrastructure is missing and development has not kept pace with the increase in population.
Some of these states have already submitted proposals for construction of roads, parks, burial or cremation grounds, markets, setting up sewerage treatment plants and water treatment plants, said sources in these states.
ThePrint spoke to officials in Telangana, Chhattisgarh and Haryana, which are among the states which have already sent proposals to access funds under UIDF.
A senior official in Chhattisgarh government’s Urban Administration and Development Department, who did not want to be named, told ThePrint, “We have sent proposals worth Rs 172 crore for 11 urban local bodies. There is no plan to send more proposals as of now.”
According to the official, the Chhattisgarh government has sent proposals under three main categories — road construction, setting up of water treatment plant, and sewage treatment plant.
“In Chhattisgarh, which is mostly dependent on agriculture, there are 174 urban local bodies. Some of which have a very small population and are scattered around the city. In these small cities, basic infrastructure is missing. Using this fund [UIDF], we are trying to provide essential facilities,” said the official.
While Chhattisgarh is not planning to send more proposals for this financial year as of now, the Haryana government, which has already “sent eight proposals” is preparing DPRs of more projects, worth Rs 450-500 crore, officials in the state’s government told ThePrint
“As of now, we have sent eight proposals worth Rs 56 core for the construction of STPs [sewage treatment plants], laying of water supply and sewer lines, construction of roads, laying of stormwater lines, and upgrading of cremation grounds in three municipal corporations, We will soon send more proposals worth Rs 500 crore for approval,” said an official at Haryana’s Directorate of Urban Local Bodies.
A senior official in the Telangana government’s Municipal Administration and Urban Development Department said the state has sent proposals for six projects, including an integrated vegetable and meat market, the development of cremation grounds, and a sewage treatment plan in all 141 urban local bodies for planned development.
“We have planned projects worth Rs 3,000 crore to be implemented across the state,” said the official.
ThePrint has reached officials in Haryana, Chhattisgarh and Telangana for information on proposals that have been approved for them. This report will be updated once a response is received.
(Edited by Uttara Ramaswamy)
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