Feb 01, 2025 12:19 PM IST
Government to set up ₹1 lakh crore Urban Challenge Fund; allocates ₹10,000 crore for 2025-26.
To ramp up urban infrastructure, Finance Minister Nirmala Sitharaman said on February 1 that the government would set up an Urban Challenge Fund of ₹1 lakh crore to finance up to 25 per cent of bankable projects and allocate ₹10,000 crore for 2025-26.

She said the fund will be used to implement the proposals for cities as growth hubs.
“The government will establish an Urban Challenge Fund of ₹1 lakh crore to implement proposals for cities as growth hubs, the creative redevelopment of cities and for water and sanitation purposes announced in the July budget. The Fund will finance up to 25% of the cost of bankable projects, with the stipulation that at least 50% of the cost is funded through bonds, bank loans and PPPs. An allocation of ₹10,000 crore is proposed in 2025-2026 for this,” she said.
“This will fuel the ongoing momentum in rebuilding urban infrastructure and drive greater demand for real estate in the urban and semi-urban areas,” said Vimal Nadar, Head of Research at Colliers India.
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