Urban Challenge Fund to unlock ₹4 lakh crore urban investment
The government just approved projects worth about ₹1.50 lakh crore spanning urban development, transport connectivity, rail capacity expansion and startup financing, with the new Urban Challenge Fund (UCF) getting the biggest slice—₹1 lakh crore.
The UCF will support cities by providing central assistance of up to 25% of a project's cost, conditional on a minimum of 50% of financing being mobilized from market sources (municipal bonds, bank loans, PPPs), aiming to unlock up to ₹4 lakh crore in urban investment over the next five years and possibly beyond.
Towards more livable cities
This is a big shift in how Indian cities get funded—moving from old-school grants to market-driven models that invite private players and encourage local reforms.
The focus is on making cities more livable: think better water, sanitation, climate resilience, and smarter growth hubs.
There's also support for smaller towns and Northeast states through new loan guarantees.
Plus, projects like the Brahmaputra tunnel, highway upgrades, metro extensions, and a fresh Startup Fund are all part of this push—so whether you're dreaming of better commutes or more job opportunities, this could shape your future city life.