Cabinet approves Rs. One Lakh Crore Urban Challenge Fund to Drive Market-Led Urban Transformation

• Urban Challenge Fund (UCF) — a Rs. 1 lakh crore Central Assistance corpus to catalyse market-linked, reform-driven urban infrastructure, replacing the earlier grant-based model.
• Funds 25% of project cost; mandates ≥50% mobilisation from market sources (municipal bonds, bank loans, PPPs); expected to leverage Rs. 4 lakh crore total investment over 5 years.
• Operationalises three Union Budget 2025-26 themes: Cities as Growth Hubs, Creative Redevelopment of Cities, Water & Sanitation.