BENGALURU: Union Finance Minister Nirmala Sitharaman on Wednesday announced that an Urban Infrastructure Development Fund (UIDF) will be established on the lines of the Rural Infrastructure Development Fund, which is expected to help state governments transform their cities into ‘sustainable cities’ in the coming years.
Experts, however, state that there is a lack of clarity on the funds needed to create urban infrastructure in Tier 2 and Tier 3 cities.
“Like the RIDF, a UIDF will be established through the use of priority sector lending shortfall. This will be managed by the National Housing Bank, and will be used by public agencies to create urban infrastructure in Tier 2 and Tier 3 cities,” Nirmala said in her Budget speech.
She added that states will be encouraged to leverage resources from grants of the 15th Finance Commission, as well as existing schemes, to adopt appropriate user charges, while accessing the UIDF. “We expect to make available Rs 10,000 crore per annum for this purpose,” she mentioned.
Federation of Karnataka Chamber Of Commerce and Industries Vice-President MG Balakrishna said, “The idea is good, but will the Centre itself fund urban infrastructure in Tier 2 and 3 cities, or should the state also contribute? This bit lacks clarity.”
Balakrishna, however, lauded the Budget, saying it is advantageous for agriculture, pharma, and infrastructure. He added that it was favourable to MSME depositors.