Centre sets up Rs 10,000-cr Urban Infra Development Fund

The Union government has unveiled its plans to establish the Urban Infrastructure Development Fund (UIDF), which will receive a total allocation of Rs 10,000 crore from the corpus of priority sector lending shortfall. The National Housing Bank (NHB) will be entrusted with the management of this fund. Minister of State for Housing & Urban Affairs, Kaushal Kishore, has announced that the NHB and the Ministry of Housing and Urban Affairs (MoHU) are currently developing guidelines to identify infrastructure projects in tier II and tier III cities.

Similar to the Rural Infrastructure Development Fund (RIDF), the UIDF will be created by utilizing priority sector lending shortfalls. States will be encouraged to capitalize on resources from the grants of the 15th Finance Commission, as well as existing schemes, by implementing appropriate user charges while accessing the UIDF. The Fund's operationalization will be modeled after the existing RIDF.

In the Union Budget 2023-24, the finance minister emphasized the incentivization of cities to enhance their creditworthiness for municipal bonds. This will be achieved through property tax governance reforms and securing user charges on urban infrastructure.