The Union Cabinet has approved the launch of the Urban Challenge Fund (UCF), a landmark initiative targeting Rs 1 lakh crore in central assistance, as announced by Union Minister Ashwini Vaishnaw. The initiative seeks to transition India’s urban development financing from a grant-based system to one driven by market forces.
Under the UCF scheme, the central government will cover 25 percent of a project’s cost, contingent on at least 50 percent of the funding being sourced from the market, leading to a projected total investment of Rs 4 lakh crore in the urban sector over the next five years.
The fund aims to create resilient, productive, and climate-responsive cities, leveraging private sector participation and citizen-centric reforms. It sets a new trajectory for economic growth, aligning with the government’s vision from the Budget 2025-26 to position cities as growth and innovation hubs.
(With inputs from agencies.)