Urban Challenge Fund approved with Rs 1 lakh crore Central assistance

Key facts

• Union Cabinet approved Rs 1 lakh crore Urban Challenge Fund to support urban infrastructure projects over five years.
• Cities must raise at least 50% of project cost from market through municipal bonds, bank loans, and public-private partnerships.
• Fund provides 25% Central assistance for projects where 50% cost is market-raised, covering projects worth Rs 4 lakh crore.
• Operational period is 2025-26 to 2030-31, extendable up to 2033-34.
• Projects identified via challenge-based framework covering urban mobility, water supply, sewerage, and legacy infrastructure retrofitting.
• Credit repayment guarantee scheme of Rs 5,000 crore approved for north-east/hilly states and cities below 1 lakh population, offering Central guarantee up to Rs 7 crore or 70% of loan amount for first-time borrowers.
• Administrative control of projects remains with state governments and urban local bodies.