Lok Sabha Question No. 4743 (UNSTARRED), answered on 2025-08-21
Subject: Implementation Framework and Guidelines for Urban Challenge Fund
Ministry: HOUSING AND URBAN AFFAIRS
Asked by: Shri Gaurav Gogoi

## GOVERNMENT OF INDIA MINISTRY OF HOUSING AND URBAN AFFAIRS LOK SABHA

## UNSTARRED QUESTION NO. 4743

## TO BE ANSWERED ON AUGUST 21, 2025

## IMPLEMENTATION FRAMEWORK AND GUIDELINES FOR URBAN CHALLENGE FUND

NO. 4743.     SHRI GAURAV GOGOI:

Will the Minister of HOUSING AND URBAN AFFAIRS be pleased to state:

- (a) whether the Government has prepared comprehensive guidelines, eligibility norms and implementation mechanisms for the Rupees one lakh crore Urban Challenge Fund announced by the Government and if so, the details thereof;
- (b) whether the Government has conducted any stakeholder consultations or capacity  assessments before announcing this Fund, especially regarding the  proposals  for  'Cities  as  Growth  Hubs',  'Creative  Redevelopment'  and improvements in 'Water and Sanitation' and if so, the details thereof;
- (c)  the  steps  taken/being  taken  by  the  Government  to  ensure  balanced  and inclusive  allocation  of  funds  under  the  scheme,  particularly  for  smaller
- cities and tier-2 urban centres;
- (d)  whether  specific  provisions  have  been  made  under  the  Fund  to  support urban development  in  the North Eastern States given their unique geographic,  demographic  and  infrastructural  challenges  and  if  so,  the
- details thereof; and
- (e)  the  timeline  fixed  for  operationalising the Urban Challenge Fund and the monitoring framework in place to assess impact across different sectors and regions?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY HOUSING AND URBAN AFFAIRS (SHRI TOKHAN SAHU)

(a) to (e):   The Government of India, in the budget for 2024-25, announced to  facilitate  development  of  Cities  as  Growth  hubs,  formulation  of  a framework for enabling policies, market-based mechanisms and regulation for Creative Brownfield Redevelopment of existing cities and, to promote water supply, sewage treatment and solid waste management projects and services  for  100  large  cities  through  bankable  projects.  In  this  context, Ministry of Housing and Urban Affairs (MoHUA) facilitated visits of Asian Development Bank and World Bank Group to 10 cities for development of knowledge framework. MoHUA  has conducted detailed stakeholder consultations with cities, State Governments & Financial institutions as a preparatory step for Urban Challenge Fund and also have taken up initiatives under  SSASCI  (Scheme  for  Special  Assistance  to  States  for  Capital Investment) 2024-25.

The Government of India, in the budget for 2025-26 has announced to set up an Urban Challenge Fund (UCF) of ₹1 lakh crore to implement the proposals for 'Cities as Growth Hubs', 'Creative Redevelopment of Cities' and 'Water and Sanitation'. As per the budget announcement, this fund is planned to finance up to 25 per cent of the cost of bankable projects with a stipulation that at least 50 per cent of the cost is funded from bonds, bank loans,  and  Public  Private  Partnerships  (PPPs).  ₹10,000  crore  has  been allocated for the financial year 2025-26. The objective is to enhance urban resilience  and  economic  productivity  through  integrated  urban  planning, land-use efficiency, and sustainable financing. The Scheme for UCF is under consideration.

*****