NEW DELHI: The Centre has created the Urban Infrastructure Development Fund (UIDF) with a total allocation of Rs 10,000 crore from the corpus of priority sector lending shortfall, a top official told TNIE. The fund will be managed by the National Housing Bank (NHB).
“The fund has been created with the infusion of Rs 10,000 crore under the National Housing Bank. The National Housing Bank (NHB) and the Ministry of Housing and Urban Affairs (MoHU) are framing guidelines for the identification of infrastructure projects in tier II and tier III cities,” a top official said.
The fund was announced in the budget this year by Finance Minister Nirmala Sitharaman.
“Like the RIDF (Rural Infrastructure Development Fund), an Urban Infrastructure Development Fund (UIDF) will be established through the use of priority sector lending shortfalls,” the finance minister had said in her speech. UIDF is on the lines of the Rural Infrastructure Development Fund, which was created by the government in 1995-96 with an initial allocation of Rs 2,000 crore. In 2022-23, the government had allocated Rs 40,000 crore for RIDF.
“States will be encouraged to leverage resources from the grants of the 15th Finance Commission, as well as existing schemes, to adopt appropriate user charges while accessing the UIDF. The Fund would be operationalised broadly along the lines of the existing Rural Infrastructure Development Fund,” the Minister of State for Housing & Urban Affairs, Kaushal Kishore, had said, in a written reply to the Lok Sabha in April.
Sitharaman while announcing the Union Budget 2023-24 said that the cities will be incentivised to improve their creditworthiness for municipal bonds. This will be done through property tax governance reforms and ring-fencing user charges on urban infrastructure.
On urban sanitation, she said all cities and towns will be enabled for 100% mechanical desludging of septic tanks and sewers to transition from manhole to machine-hole mode. Enhanced focus will be provided for the scientific management of dry and wet waste.