Overview
- The housing ministry, which released the Urban Challenge Fund guidelines Wednesday, said cities will receive an initial 30% of central money starting in September and asked states to file project proposals within 15 days.
- The ₹1 lakh crore plan sets aside ₹90,000 crore for projects, ₹5,000 crore for project preparation, and ₹5,000 crore for a loan‑guarantee facility, with state shares tied to urban population and at risk of diversion if implementation lags.
- Grants are capped at 25% of each project, with the rest to be raised through municipal bonds, bank loans, or public‑private partnerships to enforce financial discipline and draw in private capital.
- The scheme prioritises smaller cities, with credit guarantees designed to unlock bank lending for Tier‑II, Tier‑III, and hilly or north‑eastern towns that struggle to access markets.
- Cities can appoint private Special Purpose Urban Infrastructure Managers and mobilise resident groups for local services, with eligible projects ranging from digital governance and water and sewage to mobility upgrades and slum rehabilitation.