New Delhi, Feb. 16 -- The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the launch of the Urban Challenge Fund (UCF) with a total Central Assistance of Rs 1 lakh crore.

The Centre's assistance will cover 25 per cent of project costs, subject to at least 50 per cent of the funding being raised fr0m market sources. The remaining share will be contributed by States, Union Territories and Urban Local Bodies (ULBs).

The framework is expected to mobilise approximately Rs 4 lakh crore in urban investment over the next five years.

Shift to Market-Linked Urban Financing

The Fund signals a move away fr0m grant-based urban financing towards a market-linked and reform-oriented model. It will operate fr0m FY 2025-26 to FY 20...