The picture of cities will change with Rs 4 lakh crore (file photo)
Jagran Bureau, New Delhi. The Central Government has taken a big and ambitious step towards preparing the cities of the country for a developed India. In the last cabinet meeting of South Block, the Union Cabinet chaired by Prime Minister Narendra Modi has approved the Urban Challenge Fund (UCF) of Rs 1 lakh crore.
This will open the way for investment of Rs 4 lakh crore in urban areas in five years. Importantly, urban development will no longer depend only on government grants, but will be transformed by raising funds from the market, increasing private participation and on the basis of reforms.
More focus on cities
This initiative is an attempt to implement the vision announced in the Budget, which emphasizes on constructive redevelopment and sanitation reforms by considering cities as centers of economic growth. Obviously, there is an initiative to make cities not just centers of settlement but also to equip them with employment, investment and modern facilities.
Information and Broadcasting Minister Ashwini Vaishnav said that the central government will bear 25 percent of the cost of the project. The condition is that at least 50 percent of the money should be raised from the market. This will include methods like municipal bonds, bank loans and public-private partnership (PPP). The remaining 25 percent amount will be raised by state governments, union territories or urban local bodies.
The total investment from this model is estimated to reach Rs 4 lakh crore. This fund will be applicable from financial year 2025-26 to 2030-31, while the period of implementation can be extended till 2033-34. Projects will be selected in a transparent and competitive manner.
That means the cities which bring better and effective proposals will get priority. Projects will be evaluated on the basis of how much change they can bring at the economic, social and environmental levels. In this, aspects like ability to increase revenue, possibility of attracting private investment, employment generation, better safety and cleanliness will be considered important.
The scheme will cover all cities with a population of 10 lakh or more. Apart from this, the capital of the state and union territories which does not fall in this category will also be eligible. Major industrial cities with a population of one lakh or more will also be included in this.
Small and backward cities have also been given a special place in this scheme. 'Credit Repayment Guarantee Scheme' of Rs 5000 crore has been approved for all local bodies of North-Eastern and hilly states and cities with population less than one lakh in other states.
Central guarantee will be given on loan
Under this, a central guarantee of up to Rs 7 crore or 70 percent of the loan amount will be given on the loan taken for the first time. After successful payment of the first project, up to 50 percent guarantee will be given for the second project. With this, even small cities will be able to start projects worth at least Rs 20 to 28 crore.
There will be special emphasis on these areas. This scheme is a big change from the grant based system towards reform and result based financing. There will be special emphasis on areas like digital reform in urban governance, financial transparency, better service delivery, transit-based development, green infrastructure and solid waste management.
The projects will be monitored through the digital portal of the Ministry of Housing and Urban Affairs. Cities will be the center of economic development. The project areas will include schemes like developing cities as centers of economic growth, renovation of central business districts, conservation of heritage sites, brownfield projects, upgradation of water supply and sewerage systems and solid waste management. Keeping in mind climate change and disaster risk, there will also be emphasis on building resilient and safe cities.
Startup India Fund 2.0 approved
Giving encouragement to the startup sector, the Cabinet has approved 'Startup India Fund of Funds 2.0' worth Rs 10 thousand crore. Its objective is to provide capital to innovation-based industries, so that small towns and new entrepreneurs can also get investment opportunities. Ashwini Vaishnav said that under this scheme, the focus will be on deep tech, technology based and sector-unaffected startups.
The government will contribute more to alternative investment funds funding deep tech and high-tech startups. In 2016, the Central Government had created a Fund of Funds worth Rs 10,000 crore to provide seed capital to startups and enable them to take calculated risks.
Other decisions of the cabinet
Three projects of the Railway Ministry costing Rs 18,509 crore have been approved. These projects include construction of third and fourth railway lines between Kasara-Manmad, Delhi-Ambala and Bellary-Hosapete. -A road-cum-rail tunnel scheme under the Brahmaputra river in Assam has also been approved. This will be India's first and world's second road-cum-rail tunnel under water. This project will connect Gohpur and Numaligarh.
From rail to road-tunnel: Centre's mega plan, Delhi-Ambala rail section will also be expanded
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