New Delhi: Union Finance Minister Nirmala Sitharaman, in her presentation of the Union Budget 2025-2026, announced the creation of a groundbreaking Rs 1 lakh crore Urban Challenge Fund. The fund will support the government’s plans to develop ‘Cities as Growth Hubs,’ promote ‘Creative Redevelopment of Cities,’ and improve ‘Water and Sanitation’ across the country. These initiatives were first introduced in the July Budget and are now set to take shape with this substantial financial backing.
Table of Contents
Rs 1 Lakh Crore Fund to Finance Key Urban Development Projects
The Urban Challenge Fund will finance up to 25% of the cost of bankable urban development projects. The fund will require that at least 50% of the project costs be raised through bonds, bank loans, and public-private partnerships (PPPs). A Rs 10,000 crore allocation for 2025-2026 has been set aside to kickstart these ambitious plans to reshape urban landscapes across India.
Launch of National Geospatial Mission to Enhance Urban Planning
As part of the budget proposals, Sitharaman also introduced a National Geospatial Mission aimed at developing foundational geospatial infrastructure and data. This initiative, aligned with the PM Gati Shakti framework, will modernize land records, urban planning, and the design of critical infrastructure projects, facilitating more efficient and sustainable urban growth.
Socio-Economic Upliftment Scheme for Urban Workers
The Finance Minister emphasized the government’s commitment to uplifting urban poor and vulnerable groups. A new socio-economic scheme will be implemented to enhance the livelihoods and income levels of urban workers, ensuring better living standards and sustainable livelihoods for this demographic.
Government Support for Gig Workers
Acknowledging the increasing contribution of gig workers in India’s evolving services economy, Sitharaman announced that the government would provide identity cards and register gig workers on the e-Shram portal. These workers will also be offered healthcare benefits under the PM Jan Arogya Yojana, benefiting an estimated 1 crore gig workers across the country.
Also Read: Two Killed, 10 Injured in Israeli Airstrikes on Eastern Lebanon
Revamped PM SVANidhi Scheme for Street Vendors
The PM SVANidhi scheme, which has already benefitted over 68 lakh street vendors by providing respite from high-interest informal sector loans, will be revamped. The enhanced scheme will offer increased bank loans, UPI-linked credit cards with a Rs 30,000 limit, and capacity-building support to help vendors grow their businesses and access better financial resources.
SWAMIH Fund 2 to Accelerate Affordable Housing Completion
Building on the success of the Special Window for Affordable and Mid-Income Housing (SWAMIH) initiative, Sitharaman announced the establishment of SWAMIH Fund 2. This Rs 15,000 crore blended finance facility, supported by the government, banks, and private investors, will expedite the completion of an additional 1 lakh housing units, providing relief to middle-class families struggling with housing shortages and rising costs.
