The Ministry of Housing and Urban Affairs has launched Operational Guidelines for the Urban Challenge Fund (UCF) on 15th April, 2026. The scheme guidelines are in public domain and may be accessed at https://www.mohua.gov.in/static/uploads/2026/04/7950afb9b2d5cb773ba3d6c64bde9726.pdf

UCF has been introduced to catalyse a paradigm shift in urban development by encouraging cities to transition towards market-based financing and integrated regional development. The Fund aims to position cities as a bankable asset class through targeted reforms, strengthened institutional capacity, improved governance and planning frameworks, and the development of sustainable revenue-generating urban infrastructure.

Under UCF, private sector participation is governed by the respective State/ Union Territories (UT) Governments and the Urban Local Bodies (ULBs). As per UCF Guidelines, projects under UCF may be implemented by private entities endorsed by the State/UT Government. Further, ULBs, in their administrative jurisdiction, can designate the private entities as “Special Purpose Urban Infrastructure Manager (SPUIM)” for integrated delivery of housing, infrastructure, and Operations and Maintenance (O&M) in large-scale development.

Following the launch of the Operational Guidelines of UCF, the Union Government has been actively engaged with States/ UTs. In addition to this, the Hon'ble Minister for Housing and Urban Affairs held a strategic meeting with the Ministers-in-charge of the Urban Development Departments of States/UTs on April 25, 2026, in New Delhi. The discussions focused on assisting States and UTs to effectively utilize the ₹1 lakh crore central assistance earmarked under the fund.

This information was given by the Minister of State for Housing & Urban Affairs, Shri Tokhan Sahu in a written reply in the Lok Sabha today.

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SK

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