Where there's a will, there are funds to deal with urban challenges

From water supply network in villages hit by a serious autoimmune disorder to cleaning up 55 polluted lakes and redeveloping and monetising a land parcel to ease traffic congestion at a railway station - projects worth ₹15,000 crore across six states are being awarded to kick-start the Centre's ₹1 lakh crore Urban Challenge Fund.

Andhra Pradesh, Karnataka, Maharashtra, Meghalaya, Odisha and Telangana are the first states to propose urban reform ideas to transform their cities under the new fund, which was announced in the budget for 2025-26. As per guidelines, the Centre will finance 25% of the project cost, the state another 25% and the remaining 50% will be funded through municipal bonds, bank loans and public private partnership.

In the first tranche of projects cleared by the housing and urban affairs ministry, most of the states have secured bank loans to fund 50% of the project cost, according to people with knowledge of the matter.


Maharashtra has proposed projects in Pune and Nashik. In Pune, 12 villages have recently been added to the Pune city area. A senior official told ET, "The villages do not have water supply networks and the people suffer from Guillain-Barre syndrome, a serious autoimmune disorder. There is an urgent need for a water supply network."

The state has secured a loan from the International Finance Corporation to address the issue. Pune will also implement a flood mitigation project.

Odisha has got approval for redevelopment of a land parcel to ease traffic near Bhubaneswar railway station, integrated command and control centre (ICCC) at Sambalpur and Berhampur and a stormwater management plan at Sambalpur. Karnataka will clean 55 lakes in Bengaluru that are being polluted by untreated water. Andhra has planned sewerage network in four wards covering 40 square metres of area and 24x7 water supply in Madhurawada zone, where the state is planning data centres.

The ministry has approved Telangana's six major projects, which include setting up an ICCC at Khammam along Khammam-Karimnagar-Warangal corridor covering 27 urban bodies, laying sewerage network in Warangal, remediation of a dumpsite, stormwater drainage and non-motorised transport project. All projects are self-sustainable, as per ministry officials.