Union Minister of Housing and City Affairs, and Energy, Manohar Lal, chairs a finances evaluation assembly. File
| Photograph Credit score: ANI
The Union Cupboard on Friday (February 13, 2026) permitted the launch of the ‘City Problem Fund’ (UCF), a brand new Centrally sponsored scheme of the Ministry of Housing and City Affairs, with a complete Central help of ₹1 lakh crore.
It goals to help transformative and bankable city tasks via aggressive “challenge-mode” as city infrastructure can’t be funded by public finance alone. Central help will cowl 25% of mission prices, topic to elevating a minimal of fifty% of the mission price from the market, together with municipal bonds, financial institution loans, and public-private partnerships resulting in an anticipated whole funding of ₹4 lakh crore within the city sector within the subsequent 5 years.
The UCF marks a paradigm shift in India’s city growth strategy from grant-based financing to market-linked, reform-driven and outcome-oriented infrastructure creation, an announcement by the federal government stated.
It would leverage market finance, non-public participation, and citizen-centric reforms for the supply of top of the range city infrastructure. The fund goals to construct resilient, productive, inclusive, and climate-responsive cities, positioning them as a key driver of the nation’s subsequent part of financial progress, the assertion added.
The fund will likely be operational from FY 2025-26 to FY 2030-31, with an extendable implementation interval as much as FY 2033-34. It provides impact to the federal government’s imaginative and prescient, introduced within the Union Price range 2025-26, to implement proposals regarding ‘Cities as Development Hubs’, ‘Inventive Redevelopment of Cities’, and ‘Water and Sanitation’.
Tasks will likely be chosen via a clear and aggressive problem mode, making certain help to high-impact and reform-oriented proposals. There will likely be a robust thrust on reforms throughout city governance, market and monetary methods, operational effectivity, and concrete planning, the assertion stated.
Non-public sector participation will likely be inspired via structured risk-sharing frameworks and benchmarking of service supply requirements. A devoted ₹5,000 crore corpus will improve the creditworthiness of 4,223 cities, together with Tier 2 and Tier 3 cities, notably for first-time entry to market finance.
The fund will cowl all cities with a inhabitants of 10 lakh or extra (based mostly on 2025 estimates); all capitals of States and Union Territories that aren’t included within the above; and main industrial cities with a inhabitants of 1 lakh or extra. Moreover, all city native our bodies in hilly States and in northeastern States, and smaller city native our bodies with a inhabitants beneath 1 lakh will likely be eligible for help underneath the Credit score Reimbursement Assure Scheme. In precept, all cities will likely be lined underneath UCF.
Printed – February 14, 2026 06:18 pm IST
