NEW DELHI: In a major push for urban development, finance minister Nirmala Sitharaman, while presenting the Union Budget 2025-26, announced the Rs 1 lakh crore “Urban Challenge Fund“. The initiative aims to boost municipal infrastructure, improve governance, and accelerate urban planning.
With Rs 10,000 crore earmarked for 2025-26, the fund is set to address land and development challenges, promote social infrastructure, and facilitate the expansion of smart cities and urban corridors. Additionally, Rs 1.5 lakh crore in 50-year interest-free loans will be extended to states to support large-scale urban infrastructure projects.
The real estate sector has welcomed the initiative, with industry leaders acknowledging its potential to transform India’s urban landscape. Niranjan Hiranandani, chairman, NAREDCO & Hiranandani Group, described the fund as a major step forward, stating, “The Rs 1 lakh crore urban challenge fund is a strategic move to tackle urban infrastructure bottlenecks, encourage social infrastructure, and drive urban growth across key corridors.”
Ramesh Nair, CEO, Mindspace Business Parks REIT, also lauded the fund, saying, “The Rs 1 lakh crore urban challenge fund and incentivized urban reforms will strengthen governance, municipal services, and city planning. Strategic upgrades in emerging cities will unlock new business opportunities and reinforce India’s position as a global services hub.”
