URBAN INFRASTRUCTURE DEVELOPMENT
FUND – POLITY
News:
UIDF: Funding Boost for
Tier-2 and Tier-3 Cities in India
What's
in the news?
●
The Urban Infrastructure Development
Fund (UIDF), as announced in the FY24 Budget, is set to disburse its first
tranche of loans soon which is intended to fund ongoing projects in tier-2 and
tier-3 cities, according to officials from the Union Housing and Urban Affairs
Ministry (MoHUA).
Key
takeaways:
●
States are also in the process of
preparing proposals for new projects. The state governments and Union
Territories have been asked to submit proposals for projects worth Rs 5 crore
to Rs 100 crore by September-end.
●
The UIDF has been introduced to provide
low-cost loans to 459 tier-2 cities with a population between 1 lakh and
9,99,999, as well as 580 tier-3 towns with a population between 50,000 and
99,999, according to the 2011 Census.
●
The National Housing Bank (NHB),
responsible for executing the UIDF, issued guidelines in July and requested
states to submit their proposals by September.
Urban
Infrastructure Development Fund:
●
It is established through the use of priority sector lending shortfall.
Management: National Housing
Bank (NHB).
Features:
●
It is used by public agencies to create
urban infrastructure in Tier 2 and Tier 3 cities.
●
The Centre
will spend ₹10,000 crore per year for the fund.
●
It is used for the efficient use of land
resources, adequate resources for urban infrastructure, transit-oriented
development, enhanced availability and affordability of urban land, and
opportunities for all.
●
It will encourage urban planning reforms and actions to transform cities into
“sustainable cities of tomorrow.
Other
measures:
●
The cities will be incentivised to improve
their credit worthiness for municipal
bonds.
●
This will be done through property tax governance reforms and
ring-fencing user charges on urban infrastructure.
●
All cities and towns will be enabled for 100% mechanical desludging of septic tanks
and sewers to transition from manhole to machine-hole mode and the increased
focus will be provided for scientific management of dry and wet waste.
Eligible
Products:
●
The UIDF can provide funding for projects
such as water supply, sanitation, road construction, comprehensive area
development, local area planning for decongestion, heritage conservation,
town-planning schemes, and parks with open gyms that do not involve major
construction.
●
Further, the funding can be combined with
funding under other schemes of the Ministry such as Swachh Bharat Mission and
AMRUT.