NEW DELHI: The Urban Challenge Fund has approved projects worth ₹31,000 crore within just 20-25 days after finalizing its guidelines, according to D Thara, additional secretary at the Ministry of Housing and Urban Affairs.
At a FICCI conference, Thara noted that 44% of the funding for the approved projects is sourced from non-banking financial companies, while public-private partnerships contribute 22%.
Bonds represent 5-7% of the financing, with commercial banks providing the remainder.
Sanjay Kulshrestha, chairman and managing director of HUDCO, emphasized that cities contribute 60-70% of India’s GDP while occupying only about 3% of its land. He highlighted that the Urban Challenge Fund signifies a shift from subsidy-based programs to a challenge-based approach.
Through this scheme, viability gap funding can cover up to 50% of the project cost, equally shared between central and state governments. The remainder must be obtained via lenders and private equity.
Jagan Shah, a professor at IIT Delhi’s Transportation Research and Injury Prevention Centre, argued that the private sector should spearhead urban renewal, especially given the capacity constraints faced by tier-II and tier-III cities.
