About Urban Challenge Fund:
- It is a new centrally sponsored scheme of the Ministry of Housing and Urban Affairs.
- 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.
- Features of the Urban Challenge Fund:
- A minimum of 50 per cent of project financing have to be mobilised from market sources, including municipal bonds, bank loans and Public–Private Partnerships (PPPs). The remaining share may be contributed by States, Union Territories (UTs), Urban Local Bodies (ULBs) or other sources.
- Projects will be selected through a transparent and competitive challenge mode, ensuring support to high-impact and reform-oriented proposals.
- Focus area: A strong thrust on reforms across Urban Governance, Market & Financial systems, Operational efficiency, and Urban Planning
- The Fund will cover:
- All cities with a population of 10 lakh or more (2025 estimates);
- All State and Union Territory capitals not covered above; and
- Major industrial cities with a population of 1 lakh or more
- Additionally, all ULBs in hilly States, North-Eastern States, and smaller ULBs with population below 1 lakh will be eligible for support under the Credit Repayment Guarantee Scheme.
