Urban Challenge Fund

The Union Budget 2025-26 has introduced the Urban Challenge Fund (UCF) with an outlay of Rs. 1 lakh crore to promote sustainable urbanization and redevelopment.

Key Features of UCF

  • Supports projects under:
    • “Cities as Growth Hubs”
    • “Creative Redevelopment of Cities”
    • “Water & Sanitation”
  • Finances up to 25% of project costs, with at least 50% funding sourced from bonds, bank loans, or PPPs.
  • Initial allocation of Rs. 10,000 crore for 2025-26.

Challenges in Urban Development

  • Rising Urban Population: Increased from 27.7% (2001) to 31.1% (2011) (Census 2011).
  • Water crises, disaster vulnerability, pollution, and poor urban planning.
  • Issues in land management, human resources, and fund utilization.
  • Lack of clear urban ....

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