The Maharashtra government has launched the Urban Challenge Fund, a Rs 44,800-crore initiative aimed at strengthening urban infrastructure and improving civic amenities across all 423 Urban Local Bodies (ULBs) in the state.
The Urban Development Department issued the Government Resolution (GR) for the scheme on Wednesday. The programme will be implemented between 2025-26 and 2030-31, with a provision to extend it by an additional three years if required.
Announcing the initiative, Deputy Chief Minister and Urban Development Minister Eknath Shinde said the fund is intended to help cities become more modern, economically resilient and better prepared to address future urban challenges.
The scheme will follow a blended financing model, under which projects will be funded through a mix of central assistance, state support and market-based funding. Eligible projects can receive up to 25% funding from the Union government, while at least 50% of the project cost must be mobilised through municipal bonds, bank loans or Public-Private Partnership (PPP) models. The remaining 25% will be contributed by the state government or the respective urban local body.
The fund is open to all urban local bodies across Maharashtra. To enable smaller municipalities to participate, the government has introduced a loan repayment guarantee mechanism for cities with populations below one lakh, making it easier for them to raise funds for infrastructure projects.
The initiative will focus on three key areas: improving water supply and sanitation, promoting urban redevelopment, and strengthening cities as centres of economic growth.
Projects eligible for funding include digital governance, traffic decongestion measures, last-mile connectivity, redevelopment of old city areas and markets, non-motorised transport infrastructure, transit hubs, Transit-Oriented Development (TOD), urban flood mitigation, integrated waste management, roads, flyovers, riverfront development, land bank creation and relocation of dairy activities from urban areas.
For cities with populations exceeding 20 lakh, the scheme will also support convention centres, sports infrastructure, recreational facilities, modern public libraries, water sports amenities, meditation centres and wellness parks.
To ensure effective implementation, the government will appoint Project Development and Management Consultants (PDMCs), establish Project Management Units (PMUs), district-level monitoring committees and dedicated mission management cells in participating cities. Special Purpose Vehicles (SPVs) may also be formed wherever required for project execution.
Describing the initiative as a “transformational roadmap” rather than merely a funding programme, Shinde said it would improve civic infrastructure, strengthen urban services, attract investments, create employment opportunities and enhance the quality of life for citizens. He added that the government’s long-term goal is to build cities that are competitive, sustainable and financially self-reliant.
Source: News18
