India’s Urban Challenge Fund has approved Rs31,000 crore worth of projects within 20 to 25 days of its guidelines being finalised, Ms D Thara, Additional Secretary at the Ministry of Housing and Urban Affairs, said at the ninth edition of the FICCI Urban Infrastructure and Innovation Summit.
Of projects approved so far, 44 per cent of financing is coming from non-banking financial companies, 22 per cent from public-private partnerships, 5 to 7 per cent from bonds, with commercial banks accounting for the remainder, Ms Thara noted.
Mr Sanjay Kulshrestha, Chairman and Managing Director, HUDCO, noted that cities generate 60 to 70 per cent of India’s GDP from barely 3 per cent of its land, and characterised the Urban Challenge Fund as marking a shift from subsidy-based programmes to a challenge-based model. Viability gap funding under the scheme can cover up to 50 per cent of project cost, split evenly between the central and state governments, with the balance to be raised by lenders and private equity.
Mr Jagan Shah, Professor of Practice at IIT Delhi’s Transportation Research and Injury Prevention Centre, argued that the private sector, rather than government, should drive the ‘imagination’ behind urban renewal, pointing to local capacity constraints in India’s tier-two and tier-three towns.
Mr JVS Ramakrishna, Lead, FICCI Core Group on Urban Development & CEO, ParadigmIT Cybersecurity, framed 2026 as a turning point in which economic activity should be organised around city economic regions rather than municipal boundaries, with success measured by their ability to attract investments, generate employment, foster innovation and create sustainable economic value.
FICCI Director General Ms Jyoti Vij said that urban development now extends well beyond physical infrastructure to governance, technology and finance.
