Latest news with #UrbanChallengeFund
The Hindu
12 hours ago
- Business
- The Hindu
TUFIDC scouting for agency to help finance ₹1,500 crore civic works in urban bodies
Five consultancy firms have attended the pre-bid meeting of the Telangana Urban Finance Infrastructure Development Corporation (TUFIDC) to select an agency to provide 'transaction advisory services for bankable projects' in urban areas in Telangana. The institute under the Department of Municipal Administration and Urban Development is looking for an agency that can help source funds to the tune of up to ₹1,500 crore at a low rate of interest for funding basic civic infrastructure works in the 130 municipalities outside the Outer Ring Road (ORR). The civic amenities Commissioner and Director of Municipal Administration T.K. Sreedevi informed that the government wants to make use of the funds, mostly likely to be sourced from local development banks or multilateral agencies, for taking up key civic amenities like sewerage network, internal and connecting roads, drinking water supply, waste management system, streetlights and so on. 'We have seen big ticket real estate projects grounded even before the local municipal authorities were ready with the necessary civic infrastructure with basic amenities. Chief Minister A. Revanth Reddy is keen to change this and make the newbie urban and semi-urban local bodies ready for future urban growth,' she explained. Development of bankable projects is crucial to bridge the growing infrastructure financing gap with sustainable growth. But the traditional funding sources like budget allocations are not sufficient. Hence the lookout for alternate funding method, it was pointed out. The department is looking for a specialised agency with five years experience in handling two urban development infrastructure projects like water supply, sewerage, lake or water body redevelopment or conservation, solid waste management and others, worth at least ₹100 crore. Tasks of the selected agency The selected agency will have to look at bankable projects covering financial modelling, evaluate identified projects, help in selection of a developer, provide project management and monitoring support. The term of contract will be for three years with the method of evaluation being a four stage process. Bid to be opened on June 16 Through the agency, the government also intends to tap the funds from the ₹1 lakh crore Urban Challenge Fund (UCF) announced by the Centre in the budget for taking up civic infrastructure works in the municipal areas. The fund has 25% grant, 50% is to be sourced through a public private partnership (PPP) mode/ bank loans and 25 % from the local municipal authority or State government, making it ripe for seeking monies which hitherto was mostly from loans, pointed out Ms. Sreedevi. The final bids for selecting the agency will be opened on June 16.
&w=3840&q=100)
Business Standard
3 days ago
- Business
- Business Standard
ADB announces $10 billion plan to transform India's urban infra, services
Asian Development Bank (ADB) President Masato Kanda has announced a five-year plan to mobilise up to $10 billion, including third-party capital, to enhance the India's urban infrastructure and services. The plan was unveiled after Kanda's meeting with Prime Minister Narendra Modi. The plan will focus on metro expansions, new Regional Rapid Transit System (RRTS) corridors, and investments in sustainable urban development. "Cities are engines of growth," Kanda said after the meeting. 'ADB will mobilise capital, accelerate delivery, and scale solutions that keep India's urban economy moving and people thriving on the road to Viksit Bharat @ 2047.' Backed by Urban Challenge Fund At the heart of the initiative is support for India's flagship Urban Challenge Fund (UCF), which aims to attract private investment in city infrastructure. ADB will channel funds through sovereign loans, private sector financing, and technical assistance, including $3 million earmarked for developing bankable projects and building capacity in state and urban local bodies. Recent analytical work by ADB has already laid the foundation for the UCF in 100 cities, focusing on growth hubs, creative city redevelopment, and water and sanitation improvements. Urban transport, clean energy in focus India's urban population is projected to exceed 40 per cent by 2030. Responding to this rapid growth, ADB will extend its existing urban transport footprint, which includes $4 billion committed over the past decade to metro and RRTS projects in eight cities. These include the Delhi–Meerut RRTS, Mumbai Metro, Chennai Metro, and Bengaluru Metro, designed to reduce congestion and improve access for marginalised communities, including persons with disabilities. Kanda visited the Delhi–Meerut RRTS, India's first of its kind, and met women who benefited from project-linked skills training. He also toured Gurugram-based ReNew Power to discuss strengthening partnerships in renewable energy. Commitment to rural development Earlier this week, Kanda met Union Finance Minister Nirmala Sitharaman and reiterated ADB's readiness to lend between $4 billion and $4.5 billion annually in sovereign loans, along with $1 billion in private sector funding. ADB will also intensify support for rural development, including food system improvements, entrepreneurship, and employment generation. 'Our shared agenda centres on urban transformation, private sector development, and skills programmes that strengthen India's manufacturing base,' Kanda said. ADB's long-term partnership with India Kanda also met Union Housing and Urban Affairs Minister Manohar Lal Khattar to explore expanding metro networks, transit-oriented development (TOD), and scaling rooftop solar projects. ADB is engaging with CEOs from infrastructure, finance, agriculture and social sectors to attract greater private participation in infrastructure growth. Under ADB's country partnership strategy for India, 2023–2027, it stands ready to provide more than $5 billion in financing each year, including about $1 billion in nonsovereign operations to catalyse additional private investment. ADB, which began operations in India in 1986, has committed $59.5 billion in sovereign lending and $9.1 billion in nonsovereign investments as of April 2025. The active sovereign portfolio comprises 81 loans totalling $16.5 billion as of April 2025.
Time of India
3 days ago
- Business
- Time of India
Ready to assist states in certifying municipal accounts: CAG
File photo: Comptroller and Auditor General Sanjay Murthy NEW DELHI: To increase transparency and attract private investment in urban infrastructure, Comptroller and Auditor General Sanjay Murthy on Saturday said the federal auditor is ready to assist states in certifying their municipal accounts. Such certifications add credibility and value, encouraging private players to invest in urban projects, he added. The CAG will soon highlight best practices and models that municipalities can adopt, and if they adopt them, there will not be any financial audit observations, Murthy said. However, he said such an assurance would only be possible if municipal accounts are properly maintained and revenue sources clearly tracked. Transparent and reliable financial systems are essential to attracting serious bidders and funding for urban projects, Murthy said at an online event organised by think-tank Janaagraha to commemorate the 32nd anniversary of the 74th Constitutional Amendment, which granted constitutional status to urban local bodies. The announcement to certify accounts of municipalities comes ahead of the Centre's anticipated roll-out of the Rs 1 lakh crore Urban Challenge Fund, aimed at supporting large-scale projects through public-private partnerships. The housing and urban affairs ministry is finalising the framework for this, first announced in the Budget. On greater opportunities for municipal bodies with the Centre offering the Urban Challenge Fund, he said, 'We have a greater role to play in ensuring the transparency of accounts that urban local bodies do.' 'Therefore, we have envisaged or embarking on a initiative to ensure that any state govt which wants the assistance of the CAG in certification of their accounts, we will be open to work with the them to ensure that we provide this service to them to ensure the larger goal of getting investments in the urban local bodies based on certification done by the CAG, which adds greater value,' he said. Murthy also highlighted persistent challenges faced by even large municipal bodies, such as the lack of robust project reports, a key requirement for private funding. To address this, he said the CAG is planning to showcase successful models and best practices for municipalities to adopt. 'Reinventing the wheel wastes time,' he said. 'If municipalities implement proven models, we can assure them that there will be no audit objections,' the CAG said.
Indian Express
5 days ago
- Business
- Indian Express
Knowledge Nugget: Why is Urban Challenge Fund important for your UPSC exam?
What is the Urban Challenge Fund? Take a look at the essential concepts, terms, quotes, or phenomena every day and brush up your knowledge. Here's your knowledge nugget for today. (Relevance: Government initiatives and schemes are important for your exam. Questions have been asked around themes related to urbanisation in both Prelims and Mains, making it an important topic for your preparation.) While presenting the Budget 2025-26, Nirmala Sitharaman announced that the government will set up the Urban Challenge Fund of Rs 1 lakh crore to implement the proposals for 'Cities as Growth Hubs', 'Creative Redevelopment of Cities', and 'Water and Sanitation.' 1. The Urban Challenge Fund is designed to address three aspects. First, to make cities productive and efficient centres of economic growth (cities as growth hubs); second, to develop and redevelop them in a creative way (creative redevelopment of cities ), and third, to improve infrastructure. (Water and sanitation). 2. The fund will provide 25 per cent financing for bankable projects, with a stipulation that at least 50 per cent of the cost will be raised through bonds, bank loans, and Public-Private Partnerships (PPP). 3. Under the fund, while the government plans to give Rs 10,000 crore, cities are expected to get the remaining Rs 40,000 crore from floating municipal bonds, entering into private-public partnerships, and taking loans, according to a Ministry of Housing and Urban Affairs source. 4. Under 'creative redevelopment of cities', existing cities with high levels of congestion could be refurbished. This fund would encourage cities to raise market finances, as opposed to the Rs 10,000 crore Urban Infrastructure Development Fund (UIDF) announced in the Budget 2023-2024. What is urbanisation? Urbanisation is the process of transformation that occurs as a society evolves from predominantly rural to predominantly urban areas. It involves the increase in the proportion of a country's population residing in urban areas, leading to the expansion and growth of cities and towns. Additionally, it encompasses not only the physical expansion of cities but also their social, economic, and cultural transformations. The Indian Census identifies two categories of 'urban' areas: 1. Statutory towns — those which have urban local bodies like municipal corporation, municipality or municipal committee. 2. Census towns — All those places satisfying the following 3 criteria: a) Population of atleast 5000 persons. b) Minimum population density of 400 persons per sq. km. and c) 75 per cent of the male workforce is employed in non-agricultural activities 📍Megacities are cities with exceptionally large populations, often exceeding ten million inhabitants. These cities face unique challenges due to their scale, such as traffic congestion, inadequate housing, and strained infrastructure. 📍Gentrification refers to the transformation of a space or region with the displacement of people belonging to a certain class due to the influx of investment and affluent classes into that area. 📍Urban Sprawl refers to the unplanned and uncontrolled expansion of cities and towns, often resulting in the encroachment of urban areas into surrounding rural or undeveloped areas. Challenges of urban expansion 1. The major concerns in cities like Delhi, Mumbai, and Kolkata are overcrowding, inadequate infrastructure, housing shortages, and traffic congestion. The demand for water, sanitation, transportation, and healthcare is outpacing the capacity of urban systems, leading to inefficient service delivery and environmental degradation. 2. Millions live in slums without access to basic amenities. Social inequality remains a critical issue, with marginalised groups often excluded from growth opportunities. 3. The lack of private investment has been a major concern for the government. At present, the central and state governments finance over 75 per cent of city infrastructure, while ULBs finance 15 per cent through their own surplus revenues. Only 5 per cent of the infrastructure needs of Indian cities are currently being financed through private sources. 1. As per the latest report on municipal finances by the RBI (November 2024), municipal corporations (MCs) generate feeble revenue collection, adding up to merely 0.6 per cent of GDP for FY24. The revenue receipts are not just puny when compared with the receipts of the Centre (9.2 per cent) and state governments (14.6 per cent) but are also heavily dependent on property tax as the prime source of revenue. 2. The report also highlighted the undue overreliance on the central and state governments for transfers. For FY23, cumulative grants from the Centre and the states increased by 24.9 per cent and 20.4 per cent, respectively, with central transfers accounting for 2.5 per cent of the MCs' total revenue receipts. 3. According to the World Bank report, over 600 million people are expected to live in Indian cities by 2036, signalling an extensive urban expansion. A World Bank report estimates that India will need to invest $840 billion (Rs 70 lakh crore) over the next 15 years — or an average of $55 billion (Rs 4.6 lakh crore) per annum — into urban infrastructure if it is to effectively meet the needs of its fast-growing urban population. Municipal Bonds Muni bonds are seen as one of the ways for MCs to raise funds. These are debt securities issued by local governments and MCs to raise funds to fulfil their financial obligations. Investors facilitate the working of a muni bond by lending money to the local government in return for interest for a specific period of time. The creation of the Urban Challenge fund recognizes the potential of Muni bonds. 5. The Bangalore Municipal Corporation issued the first muni bond in 1997 to raise Rs 125 crore. As per SEBI, since 2017, merely 17 muni bonds have been issued, with an amount hovering around approximately Rs 2,800 crore. To render these bonds safe for investors, SEBI came up with guidelines for the issuance of municipal bonds in 2015. Post read question Consider the following statements: 1. Gentrification is the uncontrolled expansion of cities and towns, often resulting in the encroachment of urban areas into surrounding rural or undeveloped areas. 2. The Mumbai Municipal Corporation issued the first municipal bond. Which of the following statements is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) None Subscribe to our UPSC newsletter. Stay updated with the latest UPSC articles by joining our Telegram channel – IndianExpress UPSC Hub, and follow us on Instagram and X. 🚨 Click Here to read the UPSC Essentials magazine for May 2025. Share your views and suggestions in the comment box or at Khushboo Kumari is a Deputy Copy Editor with The Indian Express. She has done her graduation and post-graduation in History from the University of Delhi. At The Indian Express, she writes for the UPSC section. She holds experience in UPSC-related content development. You can contact her via email: ... Read More
Indian Express
27-05-2025
- Business
- Indian Express
Urban Challenge Fund needs to be utilised to reimagine small towns
Written by Bhuma Raman India is at the cusp of an exciting transformation in urban development. With the announcement of the Rs 1 Lakh Crore 'Urban Challenge Fund', the Government of India is taking a bold step towards reimagining our cities. This fund, with Rs 10,000 Crore earmarked for the first year, seeks to tackle the most pressing challenges in urban growth and development. The Urban Challenge Fund is designed to address three aspects. First, to make cities productive and efficient centres of economic growth; second, to develop and redevelop them in a creative way, and third, to improve infrastructure, especially water and sanitation. The fund will provide 25 per cent financing for bankable projects, with a stipulation that at least 50 per cent of the cost will be raised through bonds, bank loans, and Public-Private Partnerships (PPP). According to the World Bank report, over 600 million people are expected to live in Indian cities by 2036, signalling an extensive urban expansion. This growth presents significant opportunities, but also severe challenges. Overcrowding, inadequate infrastructure, housing shortages, and traffic congestion are major concerns in cities like Delhi, Mumbai, and Kolkata. The demand for water, sanitation, transportation, and healthcare is outpacing the capacity of urban systems, leading to inefficient service delivery and environmental degradation. Additionally, millions live in slums without access to basic amenities. Social inequality remains a critical issue, with marginalised groups often excluded from growth opportunities. Moreover, poor urban planning and fragmented governance hinder effective solutions. Addressing these challenges requires sustainable urban planning, investments in affordable housing, improving infrastructure, and embracing technology. A World Bank report estimates that India will need to invest $840 billion (Rs 70 lakh crore) over the next 15 years — or an average of $55 billion (Rs 4.6 lakh crore) per annum — into urban infrastructure if it is to effectively meet the needs of its fast-growing urban population. The budget allocation of Rs 10,000 crore is far less than what is needed to meet India's urban challenge. The report also recommends expanding the capacities of city agencies to deliver infrastructure projects. Currently, the 10 largest Urban Local Bodies (ULBs) were able to spend only two-thirds of their total capital budget over the three recent fiscal years. At present, the central and state governments finance over 75 per cent of city infrastructure, while ULBs finance 15 per cent through their own surplus revenues. Only 5 per cent of the infrastructure needs of Indian cities are currently being financed through private sources. Between 2011 and 2018, urban property tax stood at 0.15 per cent of GDP compared to an average of 0.3-0.6 per cent of GDP for low- and middle-income countries. Low service charges for municipal services also undermine their financial viability and attractiveness to private investment. Over the medium term, the report suggests a series of structural reforms, including those in the taxation policy and fiscal transfer system, which can allow cities to leverage more private financing. In the short term, it identifies a set of large, high-potential cities that can raise higher volumes of private financing. Notwithstanding these recommendations, this article argues for investment in the small towns of India for more inclusive growth. There is strong evidence that India's level of urbanisation is higher than official statistics suggest. This discrepancy arises because peripheral urban areas are often classified as rural in official data. Researchers have proposed alternative estimates by broadening the official definition of what constitutes an urban area. Additionally, population growth in India's megacities has slowed between 2001 and 2011 compared to the previous decade (1991-2001). Further investigation is needed to understand the reasons behind this decline. Recent research in India suggests that large cities are not necessarily the main drivers of economic growth. The limited availability of formal sector jobs in urban areas, beyond those requiring highly specialised skills, has led to 'exclusionary urbanisation.' As a result, urbanisation in India is becoming more dispersed, with small towns growing at a faster pace than cities between 2001 and 2011. It is now recognised that small and medium towns (S&MTs) can play a crucial role in development by leveraging their cost advantages in manufacturing, including lower production and living expenses. These towns also contribute significantly to the diversification of the rural economy, and their growth is seen as more important than that of cities in reducing rural poverty. S&MTs support rural development by providing essential market services and acting as links between rural and urban areas. Further, the post-Covid trend to adopt collaborative workspaces not only offers new opportunities for remote workers but can also stimulate the development of small and medium towns by fostering new businesses and entrepreneurial activity. They can be seen as valuable components of a town's social infrastructure, potentially contributing to more sustainable and holistic regional development Nearly 70 per cent of future job growth is expected to occur in cities, especially emerging ones with populations under 1 million, which will drive consumption. With 70 per cent of India's urban landscape for 2030 still undeveloped, significant opportunities arise for domestic and international investments in infrastructure and development. A June 2023 EY report emphasised the potential of small towns, predicting a boost to India's economy. Infrastructure improvements, supportive policies, and a skilled workforce in Tier 2 cities could increase growth from 11 per cent (2019–2023) to 14 per cent (2023–2030). The report identified cities like Visakhapatnam, Jaipur, Vadodara, and Kochi as emerging hubs for Global Capability Centres (GCC), with Coimbatore set to become a major GCC centre by 2030. India's smaller towns have potential for rapid urban growth due to lower costs, skilled workers, and market opportunities, but a lack of infrastructure remains a barrier. There are barely 100 cities, including metropolises and megapolises, in India as against 7000-plus small towns. These towns are in dire need of investments in infrastructure, provision of essential services including health and education, and employment generation on an emergency footing, which will not only help in shifting labour from agriculture, but also help in reducing the burden of migration on large cities. The ULBs of these small and medium towns also need to undertake capacity-building measures to meet this urban challenge. The Urban Challenge Fund is an opportunity to tackle the issue of small-town development rather than focusing on large cities. The experience with JNNURM (Jawaharlal Nehru National Urban Renewal Mission) and Smart Cities Mission shows that focusing on large cities does not automatically lead to a ripple effect. The disparities in regional development continue to persist. The writer is co-convener, Habitat Forum (INHAF)
