Urban Challenge Fund Approves Projects Worth Rs 31,000 Crore, Says MoHUA Official

New Delhi, July 22, 2026: Projects worth Rs 31,000 crore have been approved under India’s Urban Challenge Fund within 20 to 25 days of its guidelines being finalized, according to D Thara, Additional Secretary at the Ministry of Housing and Urban Affairs (MoHUA). Speaking at the ninth edition of the FICCI Urban Infrastructure and Innovation Summit, Thara outlined the financial breakdown of the approved initiatives, stating that non-banking financial companies account for 44 percent of the financing, public-private partnerships contribute 22 percent, and municipal bonds represent 5 to 7 percent, with commercial banks providing the remainder.

Highlighting the economic imperative of municipal development, Sanjay Kulshrestha, Chairman and Managing Director of HUDCO, observed that urban areas generate 60 to 70 percent of India’s GDP despite occupying barely 3 percent of its land mass. He characterized the Urban Challenge Fund as a key transition from traditional subsidy-driven programs to a competitive, challenge-based model. Under the scheme, viability gap funding can cover up to 50 percent of a project’s total cost, split equally between the central and state governments, while lenders and private equity investors fund the remaining balance.

Addressing institutional challenges in smaller urban centers, Jagan Shah, Professor of Practice at IIT Delhi’s Transportation Research and Injury Prevention Centre, emphasized that the private sector must take a primary role in driving the strategy behind urban renewal due to capacity constraints in tier-two and tier-three cities. Meanwhile, JVS Ramakrishna, Lead of the FICCI Core Group on Urban Development and CEO of ParadigmIT Cybersecurity, stated that economic planning should pivot toward city-economic regions rather than strictly municipal boundaries, measuring success through job creation, investment attraction, innovation, and long-term economic sustainability.