New Delhi, Feb. 14 -- The Union Cabinet, led by Prime Minister Narendra Modi, has approved the launch of the Urban Challenge Fund (UCF) to modernise India's cities through a market-driven approach. The central government will provide Rs 1 lakh crore in assistance over the next five years to support large-scale urban infrastructure projects. This move is expected to trigger a total investment of Rs 4 lakh crore in the urban sector by 2031.

The new fund signals a major change in how the government finances city development. Instead of relying solely on government grants, cities will now be encouraged to raise money from the market and private investors. The government stated that this represents a "paradigm shift in India's urban developme...