NEW DELHI: Resident welfare associations (RWAs), real estate developers, and private entities are now empowered to initiate civic projects, such as water and sanitation, thanks to the newly launched Urban Challenge Fund by the Centre.
Civic and urban development projects are no longer exclusively the responsibility of financially constrained municipalities. Multiple RWAs can collaborate to address civic issues by forming a group, devising a project proposal, and submitting it to local civic agencies.
If a developer’s high-end apartment complex faces waterlogging on access roads, they can propose and execute a project outside the colony. This new strategy, facilitated by the Urban Challenge Fund, will see both state and Centre covering half the project costs, with the remainder funded through market mechanisms.
The ₹1 lakh crore fund will invite cities to propose various projects and compete for allocation from this financial pool. The Centre has set aside ₹20,000 crore annually for the next five years, which state governments will match, with the remaining funding sourced from bank loans, private investment, or municipal and citizen bonds.
This Urban Challenge Fund aims to support projects in three areas: creative city redevelopment, establishing growth hubs, and improving water and sanitation. A senior official stated, “Public finance alone cannot support urban infrastructure; it must engage with the market through bankable projects,” a sentiment echoed by RWAs and private developers frustrated with inadequate civic infrastructure.
One major focus will be the revitalization of city centers through the upgrading of existing infrastructure. The development of new and semi-new cities will also be promoted as growth hubs. The Ministry of Housing and Urban Affairs has already funded several projects under the Special Assistance to States for Capital Investment (SASCI) scheme this fiscal year.
