♦ The Union Cabinet chaired by the Prime Minister Narendra Modi approved the launch of the Urban Challenge Fund (UCF) with a total Central Assistance (CA) of Rs. One lakh crore.

♦ CA will cover 25% of the project cost, subject to raising minimum 50% of the project cost from market.

♦ This will lead to a total investment of Rs. Four lakh crore in urban sector in next five years, marking a paradigm shift in India’s urban development approach from grant- based financing to market-linked, reform-driven and outcome-oriented infrastructure creation.

♦ The Urban Challenge Fund will leverage market finance, private participation and citizen- centric reforms for delivery of high-quality urban infrastructure.

♦ The Fund aims to build resilient, productive, inclusive and climate-responsive cities, positioning those as key driver of the country’s next phase of economic growth.

♦ The Fund will be operational from FY 2025–26 to FY 2030–31, with an extendable implementation period up to FY 2033–34.