Government to provide Rs 10,000 crore/year under Urban Infrastructure Development Fund

The government will provide Rs 10,000 crore per annum for an Urban Infrastructure Development Fund (UIDF), that will be established through use of priority sector lending shortfall.

Announcing the proposal during her speech for the 2023-24 budget, Finance Minister Nirmala Sitharaman said the UIDF will be managed by the National Housing Bank and will be used by public agencies to create urban infrastructure in Tier 2 and Tier 3 cities.

“States will be encouraged to leverage resources from the grants of the 15th Finance Commission, as well as existing schemes, to adopt appropriate user charges while accessing the UIDF,” she said.


The finance minister said states and cities will be encouraged to undertake urban planning reforms and actions to transform cities into ‘sustainable cities of tomorrow’. It means efficient use of land resources, adequate resources for urban infrastructure, transit-oriented development, enhanced availability and affordability of urban land, and opportunities for all.

Also, all cities and towns will be enabled for 100% mechanical desludging of septic tanks and sewers to transition from manhole to machine-hole mode. Enhanced focus will be provided for scientific management of dry and wet waste.