India Budget: Government to establish Urban Challenge Fund of Rs 1 lakh crore

The government will establish an Urban Challenge Fund of Rs 1 lakh crore, said Finance Minister Nirmala Sitharaman on Saturday.

The fund is set to implement the proposals for 'Cities as Growth Hubs'. This was announced as a part of creative redevelopment of cities and for water and sanitation purposes in July 2024 budget.

"This fund will 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 PPPs and allocation of 10,000 crore is proposed in 2025 to 26," said Sitharaman.


She said that 15 Crore households were now covered under Jal Jeevan Mission, terming it as an underrated achievement.

The finance minister also said that under the Special Window for Affordable and Mid-Income Housing (SWAMIH), 50,000 dwelling units have been completed in the stressed housing projects, with keys handed over to the homebuyers.

Another 40,000 units will be completed in 2025, further helping middle-class families which were paying EMIs on loans taken for apartments, while also paying rent for their current dwellings, she said.

"Building on this success, a SWAMIH Fund 2 will be established as a blended finance facility with contributions from the government, banks and private investors. This fund of Rs 15,000 crore will aim for expeditious completion of another one lakh units," Sitharaman said.

The finance minister also announced that the PM Street Vendor's AtmaNirbhar Nidhi (PM SVANidhi) will be revamped with enhanced loans from banks, UPI-linked credit cards with Rs 30,000 limit, and capacity-building support.

The scheme has benefitted more than 68 lakh street vendors, giving them respite from high-interest informal sector loans, she said.

PM SVANidhi is a special micro-credit facility for providing affordable loans to street vendors.