UPSC Prelims Practice Questions — Union Minister Shri Manohar Lal Launches Operational Guidelines for Urban Challenge Fund

Question 1

With respect to the financial figures associated with the Urban Challenge Fund (UCF), which one of the following is the LARGEST amount — representing the total urban-sector investment the Fund aims to catalyse over five years?

Accepted Answer

₹4 lakh crore

Answer

₹1 lakh crore

Answer

₹10,000 crore

Answer

₹5,000 crore

Question 2

With reference to the financial architecture of the Urban Challenge Fund, consider the following statements:
1. The total Central Assistance corpus of the Fund is ₹1 lakh crore.
2. The Fund aims to catalyse a total urban-sector investment of about ₹4 lakh crore over five years.
3. The entire ₹1 lakh crore corpus has been allocated in FY 2025-26 itself.
4. Central assistance to any project is capped at 25% of its approved cost.
Which of the statements given above are correctly identified?

Accepted Answer

1, 2 and 4

Answer

1 and 2 only

Answer

2, 3 and 4

Answer

1, 2, 3 and 4

Question 3

Under the Urban Challenge Fund's funding pattern, the condition that 'a minimum of 50% of a project's cost be mobilised from market sources' refers to funds raised principally through which of the following?

Accepted Answer

Municipal bonds, bank loans and Public–Private Partnerships (PPPs)

Answer

Union grants topped up by ULB own-source revenue

Answer

Central assistance combined with viability gap funding

Answer

Concessional external borrowings from multilateral agencies only

Question 4

As per the Urban Challenge Fund's prescribed funding formula, the cost of an approved project is met from how many distinct funding streams (Central assistance, market mobilisation, and the balance from State/ULB)?

Accepted Answer

Three

Answer

Two

Answer

Four

Answer

Five

Question 5

With reference to the three thematic verticals of the Urban Challenge Fund, consider the following statements:
1. The 'Cities as Growth Hubs' vertical seeks to strengthen city regions as economic engines by connecting economic nodes.
2. The 'Creative Redevelopment of Cities' vertical focuses on revitalising congested city cores and historic areas.
3. Unlike the other two, the 'Water and Sanitation' vertical lies outside the Urban Challenge Fund and is funded only under the Jal Jeevan Mission.
Which of the statements given above are correct?

Accepted Answer

1 and 2 only

Answer

1 only

Answer

2 and 3 only

Answer

1, 2 and 3

Question 6

Projects under the three thematic verticals of the Urban Challenge Fund are selected through a competitive challenge-based framework and monitored through the single digital portal of which of the following?

Accepted Answer

Ministry of Housing and Urban Affairs

Answer

NITI Aayog

Answer

Ministry of Finance

Answer

Department for Promotion of Industry and Internal Trade

Question 7

With reference to the Credit Repayment Guarantee Sub-Scheme (CRGSS) launched under the Urban Challenge Fund, consider the following statements:
1. It has a corpus of ₹5,000 crore.
2. For a first-time loan it provides a Central guarantee of up to ₹7 crore or 70% of the loan amount, whichever is lower.
3. It targets cities/ULBs in North-Eastern & Hilly States/UTs and smaller ULBs below 1,00,000 population in other States/UTs.
4. Its guarantee cover is available only to metropolitan cities with population above 10 lakh.
Which of the statements given above are correctly identified?

Accepted Answer

1, 2 and 3

Answer

1 and 4 only

Answer

2, 3 and 4

Answer

1, 2, 3 and 4

Question 8

With reference to the guarantee structure of the Credit Repayment Guarantee Sub-Scheme (CRGSS), consider the following statements:
1. For a first-time loan, the guarantee cover is up to ₹7 crore or 70% of the loan amount, whichever is lower.
2. For a subsequent loan taken after successful repayment of the first, the cover is up to ₹7 crore or 50% of the loan amount, whichever is lower.
3. The Sub-Scheme is administered under the Ministry of Finance and is unconnected with the Urban Challenge Fund.
Which of the statements given above are correct?

Accepted Answer

1 and 2 only

Answer

1 and 3 only

Answer

2 and 3 only

Answer

1, 2 and 3

Question 9

The credit guarantees under the Credit Repayment Guarantee Sub-Scheme (CRGSS) of the Urban Challenge Fund are operationalised through which of the following agencies?

Accepted Answer

National Credit Guarantee Trustee Company (NCGTC)

Answer

Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

Answer

Small Industries Development Bank of India (SIDBI)

Answer

Reserve Bank of India (RBI)

Question 10

The Urban Challenge Fund, a Centrally Sponsored Scheme of the Ministry of Housing and Urban Affairs, is to be implemented from FY 2025-26 up to which financial year (before any permitted extension)?

Accepted Answer

FY 2030-31

Answer

FY 2029-30

Answer

FY 2032-33

Answer

FY 2027-28

Question 11

In the context of the Urban Challenge Fund announced in Union Budget 2025-26, the concept of 'Cities as Growth Hubs' primarily refers to which of the following?

Accepted Answer

Developing large cities together with their surrounding regions as engines of economic growth by strengthening economic infrastructure and connectivity

Answer

Relocating polluting industries out of congested metros to newly built satellite towns

Answer

Declaring selected cities as Special Economic Zones with tax holidays for investors

Answer

Merging adjoining municipal corporations into unified metropolitan governments

Question 12

Which one of the following is the primary feature that distinguishes the Urban Challenge Fund from predecessor urban missions such as AMRUT 2.0, the Smart Cities Mission and PMAY-U?

Accepted Answer

Its reliance on a market-linked, leveraged financing model rather than a predominantly grant-based one

Answer

It is the first urban mission to be funded entirely by the Union Government

Answer

It exclusively covers metropolitan cities with a population above 40 lakh

Answer

It is executed solely by State governments without any Central role

UPSC Prelims Practice Questions — Union Minister Shri Manohar Lal Launches Operational Guidelines for Urban Challenge Fund

Q1. With respect to the financial figures associated with the Urban Challenge Fund (UCF), which one of the following is the LARGEST amount — representing the total urban-sector investment the Fund aims to catalyse over five years?

Q3. Under the Urban Challenge Fund's funding pattern, the condition that 'a minimum of 50% of a project's cost be mobilised from market sources' refers to funds raised principally through which of the following?

Q4. As per the Urban Challenge Fund's prescribed funding formula, the cost of an approved project is met from how many distinct funding streams (Central assistance, market mobilisation, and the balance from State/ULB)?

Q6. Projects under the three thematic verticals of the Urban Challenge Fund are selected through a competitive challenge-based framework and monitored through the single digital portal of which of the following?

Q9. The credit guarantees under the Credit Repayment Guarantee Sub-Scheme (CRGSS) of the Urban Challenge Fund are operationalised through which of the following agencies?

Q10. The Urban Challenge Fund, a Centrally Sponsored Scheme of the Ministry of Housing and Urban Affairs, is to be implemented from FY 2025-26 up to which financial year (before any permitted extension)?

Q11. In the context of the Urban Challenge Fund announced in Union Budget 2025-26, the concept of 'Cities as Growth Hubs' primarily refers to which of the following?

Q12. Which one of the following is the primary feature that distinguishes the Urban Challenge Fund from predecessor urban missions such as AMRUT 2.0, the Smart Cities Mission and PMAY-U?