NEW DELHI: The Centre’s flagship Urban Challenge Fund (UCF) has accorded in-principle approval to 33 projects since the scheme was operationalised in April, with Odisha, Madhya Pradesh and Gujarat accounting for more than half of the sanctioned proposals, Union Housing and Urban Affairs Minister Manohar Lal told the Lok Sabha in response to questions on the scheme’s implementation..
According to the government data, Odisha has secured seven projects, while Madhya Pradesh and Gujarat have received six each, reflecting an early lead by states that have moved quickly to prepare bankable urban infrastructure proposals.
Announced in the Union Budget and backed by a central aid of Rs 1 lakh crore, the UCF marks a significant departure from the Centre’s earlier development schemes, which largely relied on direct government grants. Instead, the UCF is designed to leverage public money to attract private and institutional investment into city infrastructure.
Under the funding model, the Centre will provide only up to 25% of a project’s cost, while at least 50% must be financed through market-based sources, including municipal bonds, bank loans and public-private partnerships. The remaining cost will have to be borne by the state, Union Territory or urban local body. It is intended to mobilise nearly four times the Centre’s investment, but it also places greater responsibility on states develop financially viable projects.
