The government will set up a Rs 10,000 crore per year Urban Infrastructure Development Fund (UIDF) to be used for creating infrastructure in Tier-2 and Tier-3 cities, Union Finance Minister Nirmala Sitharaman announced in her Budget speech. The minister said the fund would be established through the use of priority sector lending shortfall.
“This will be managed by the National Housing Bank, and will be used by public agencies to create urban infrastructure in Tier-2 and Tier-3 cities. States will be encouraged to leverage resources from the grants of the 15th Finance Commission, as well as existing schemes, to adopt appropriate user charges while accessing the UIDF. We expect to make available Rs 10,000 crore per annum for this purpose,” she said.
Sitharaman also said states and cities would be encouraged to undertake reforms in urban planning and take steps to make cities more sustainable. “This means efficient use of land resources, adequate resources for urban infrastructure, transit-oriented development, enhanced availability and affordability of urban land, and opportunities for all,” she said.
Among the reforms would be property tax governance reforms and ring-fencing user charges on urban infrastructure, she said. Cities would be given incentives to improve credit worthiness for municipal bonds, she added.
The government would spend Rs 23,175.01 crore on Metro and mass rapid transit system projects, including the National Capital Region Transport Corporation that is implementing the Delhi-Meerut rapid transit project, in 2023-24, similar to 2022-23’s BE Rs 23,875 crore.
