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News: Union Minister Shri Manohar Lal launched Operational Guidelines for Urban Challenge Fund and Credit Repayment Guarantee Sub-Scheme in New Delhi.
About Operational Guidelines for Urban Challenge Fund (UCF)
- It is a market-linked, reform-driven, and outcome-oriented catalytic instrument for urban infrastructure financing.
- Duration: It will be implemented from FY 2025–26 to FY 2030–31.
- Nodal Ministry: It is implemented by the Ministry of Housing and Urban Affairs (MoHUA).
- Funding: The scheme has a total Central Assistance of ₹1 lakh crore, designed to mobilize nearly ₹4 lakh crore investment.
- Aim: It aims to transform cities into investment-ready and financially sustainable growth hubs, mobilize private capital, and support the vision of Viksit Bharat @2047.
- Key Features:
- Funding Model: Central Assistance is limited to 25% of project cost, while at least 50% funding is mobilized through market-based sources like municipal bonds, bank loans, and PPPs.
- Focus Areas: It supports redevelopment of old city areas, urban mobility, last-mile connectivity, non-motorised transport, water, sanitation, and climate-resilient infrastructure.
- Eligibility: Funding is linked to project bankability and challenge-based selection, along with implementation of urban reforms by Urban Local Bodies.
- Significance: It enforces fiscal discipline and promotes financial sustainability in cities through market-based financing.
About Credit Repayment Guarantee Sub-Scheme (CRGSS)
- A sub-scheme that provides credit guarantees to enable cities to access market-based financing.
- Corpus: It has an allocation of ₹5,000 crore.
- Aim: It aims to bridge the credit gap and improve access to finance for smaller cities.
- Key Features:
- Guarantees: It provides credit guarantees to lenders to enable cities to access market-based financing.
- Target Group: It focuses on supporting Tier-II and Tier-III cities and cities in hilly and North-Eastern regions.
