Lok Sabha Question No. 4536 (UNSTARRED), answered on 2025-03-27
Subject: Funds for Infrastructural Demand
Ministry: HOUSING AND URBAN AFFAIRS
Asked by: Shri Kalyan Banerjee

## GOVERNMENT OF INDIA

## MINISTRY OF HOUSING AND URBAN AFFAIRS

## LOK SABHA

## UNSTARRED QUESTION NO. 4536

TO BE ANSWERED ON MARCH 27, 2025

## FUNDS FOR INFRASTRUCTURAL DEMAND

NO. 4536.

SHRI KALYAN BANERJEE:

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

- (a) Whether the Government has ensured sufficient funding in the budget 202526  for  urban  local  bodies  to  meet  the  critical  infrastructure  and  service demands in the country;
- (b) if  so,  the  manner  in  which  the  Government  balances  large-scale  capital projects with immediate urban needs like affordable housing, sanitation and public transport through the allocated budget; and
- (c) the  steps  taken/proposed  to  be  taken  by  the  Government  to  ensure  timebound  implementation  of  the  'Houses  for  All'  initiative,  specifically to eradicate slums in the metro cities?

## ANSWER

## MINISTRY OF HOUSING AND URBAN AFFAIRS

## THE MINISTER OF STATE IN THE (SHRI TOKHAN SAHU)

- (a) & (b): As  per  the  provisions  of  Article  243  W  of  the  Constitution,  in conjunction  with  the  Seventh  and  Twelfth  Schedules,  matters  relating  to urban  development  fall  within  the  purview  of  States/  Urban  Local  Bodies (ULBs).  However,  Ministry  of  Housing  and  Urban  Affairs  (MoHUA)  provides programmatic  support  to  the  States/  Union  Territories  (UTs)  in  their  urban development  agenda  through  its  flagship  Missions/  Programmes  viz.  Atal Mission  for  Rejuvenation  and  Urban  Transformation  (AMRUT)  2.0,  Swachh Bharat  Mission-  Urban  (SBM-U)  2.0,  Smart  Cities  Mission  (SCM),  Pradhan Mantri  Awas  Yojana-  Urban  (PMAY-U),  Urban  Transport  (UT),  etc.  These missions/ schemes/ projects are implemented by the States/Uts in accordance with the mission guidelines to improve the ease of living in cities and towns covered under these missions. Central Assistance is sanctioned/
- released to the State Governments/Uts and not to ULBs.

The growing urban infrastructure requirement is financed through budgetary support, supplemented by private sources of finance including Public Private Partnership (PPP). In order to ensure that urban infrastructure projects are adequately  funded  without  over-reliance  on  limited  Government  resources, the Public Private Partnership (PPP) as a means  of financing urban infrastructure has been covered under all the Mission guidelines as indicated below:

- i. AMRUT 2.0 guidelines state that cities having population above 10 lakh are mandated to take up 10% of their projects in PPP Mode.
- ii.  SCM promotes PPP projects to be undertaken in the 100 Smart cities. If the Government of India funds and the matching contribution by the States/ULBs meet  only  a  part  of  the  project  cost,  balance  funds  are  expected  to  be mobilized from other sources including PPP.
- iii.  SBM-U 2.0 encourages exploring the option of PPP mode for development of urban infrastructure, to be decided by the concerned State/ULB.
- iv.  PMAY-U 'Housing for All' Mission encourages private investment for construction of houses in Affordable Housing in Partnership (AHP) and in-situ slum development verticals. Affordable Rental Housing Complexes (ARHCs) was launched as a sub scheme under PMAY-U on 31/07/2020 to utilize the vacant  Government  funded  houses  constructed  under  Jawaharlal  Nehru National  Urban  Renewal  Mission  (JNNURM)  and  incentivizing  Public/Private Entities to leverage investment for creating affordable rental housing stock, if they have available vacant land.
- v.  Metro Rail Policy 2017 enables innovative financing through Transit Oriented Development  (TOD)  and  Value  Capture  Finance  (VCF).  The  policy  also encourages  PPP  for  implementation  of  the  metro  rail  projects  to  leverage both public and private resources, expertise and entrepreneurship. As per the policy, the State Government desirous of availing central financial assistance for upcoming metro rail projects, should mandatorily explore the possibility of having a PPP arrangement in some form for implementation, operation and the proposed metro rail project, to  the extent feasible.  Further,  PM-eBus  Sewa bus operations  in  urban  areas  with  central  assistance  of  Rs.20,000  crore  for
6. maintenance,  fare  collection  or any  other  unbundled  activities  of Scheme,  launched  on 16th August, 2023, aims to augment  city deploying 10,000 electric buses on PPP model.

Moreover, in order to incentivise the ULBs to tap the capital markets, under AMRUT, credit rating work for 483 cities have been awarded and completed in  468  cities.  Out  of  468  cities,  162  cities  have  received  Investible  Grade Rating (IGR) i.e.  rating B (-) and above. MoHUA has been providing incentive to ULBs for issuance of Municipal Bonds at the rate of ₹ 13 crore per ₹ 100 crore worth of bonds issued with maximum incentive of ₹ 26 crore per ULB. Second time eligibility only for issuance of Green bonds at the rate of ₹10 crore  incentive  per  ₹100  crore  of  bonds  issued,  restricted  to  a  maximum incentive of ₹20 cr.  So far, ₹ 4,984 crore has been raised through issuance of Municipal  Bonds  &  Green  bonds  for  upgrading  urban  infrastructure  by  13 ULBs. As an incentive, ₹ 315.83 crore has been released under AMRUT/AMRUT 2.0.

Further, to give boost to the urban infrastructure sector, in the Budget 202526, Government has announced setting up of an Urban Challenge Fund of ₹1 lakh crore for improving urban infrastructure in the country. This measure is expected  to  stimulate  the  ULBs  in  raising  private  investment  through  PPP mode for financing urban infrastructure.

- (c) Based on project proposals received from the States/UTs, a total of 118.64 lakh houses including urban poor and slum dwellers have been sanctioned by the  Ministry,  out  of  which  112.73  lakh  have  been  grounded  and  91.50  lakh houses are completed/delivered to the beneficiaries. The remaining houses are at different stages of construction. Further, a total of Rs.1.99 Lakh crore of  Central  Assistance  is  sanctioned,  out  of  which  Rs.  1.68  Lakh  crore  has been  released  to  States/UTs.  Further,  MoHUA  has  launched  PMAY-U  2.0 Mission w.e.f. 01.09.2024 for assisting additional one crore families of urban areas across the country to construct, purchase & rent a house for eligible beneficiary at affordable cost.

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