Budget 2025 allocates Rs 1 lakh crore Urban Challenge Fund to boost cities as growth hubs

NEW DELHI: In a major push for urban development, the government announced the creation of an Urban Challenge Fund worth Rs 1 lakh crore in the Union Budget 2025 presented on Saturday.

The fund aims to support initiatives under the ‘Cities as Growth Hubs’ programme, focusing on creative redevelopment of cities, water, and sanitation improvements.

Finance Minister Nirmala Sitharaman, in her speech, said, “The Government will set up an 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’.

‘Urban Challenge Fund’ नगरपालिका सेवाओं, शहरी भूमि और आयोजना से संबंधित शहरी क्षेत्र सुधारों को प्रोत्साहित करने में महत्वपूर्ण भूमिका निभाएगा। #ViksitBharatBudget2025 pic.twitter.com/2i9zGrseQf

— Manohar Lal (@mlkhattar) February 1, 2025

The Urban Challenge Fund will provide financial support for urban renewal projects across the country. This initiative is expected to encourage innovation in urban planning and infrastructure while ensuring better services for residents. The fund will be instrumental in making cities more liveable, efficient, and sustainable.

The Budget also emphasised urban sector reforms to improve governance, municipal services, urban land use, and planning. The government plans to incentivise states and urban local bodies that implement these reforms effectively. This will enhance the functioning of cities and help them cater to the growing population efficiently.

Another key announcement was the launch of a National Geospatial Mission, which will develop foundational geospatial infrastructure and data. This mission, in coordination with PM Gati Shakti, will help in modernizing land records, urban planning, and designing infrastructure projects. The use of geospatial technology is expected to improve decision-making in urban development and ensure better resource allocation.

The Urban Challenge Fund will position cities as vibrant engines of economic growth, drive forward-thinking redevelopment, and enhance urban infrastructure, creating a solid foundation for sustained urban progress. #CREDAINational #Budget #Budget2025 #realestate… pic.twitter.com/hmLGUzPaDj

— CREDAI National (@CREDAINational) February 1, 2025

Recognizing the need to uplift urban workers, the government announced a new scheme for their socio-economic development. The initiative aims to help urban workers improve their income, secure sustainable livelihoods, and enhance their quality of life. This is part of the government’s broader vision to empower the urban poor and vulnerable groups through targeted financial and skill development programs.

The government’s urban development push in Budget 2025 highlights its commitment to transforming Indian cities into engines of economic growth. With a focus on funding infrastructure, reforms, modernisation, and livelihoods, these initiatives aim to build smarter, more sustainable, and inclusive cities for the future. (ANI)