The government has approved or given in-principle approval to 33 projects under the Urban Challenge Fund (UCF), a Union Minister informed the Lok Sabha.

UCF is a new Ministry of Housing and Urban Affairs scheme with ₹1 lakh crore central assistance, operational FY 2025-26 to FY 2030-31 (extendable to FY 2033-34), supporting projects via competitive 'challenge-mode' selection.

Central assistance is capped at 25% of bankable project cost, with at least 50% to be mobilised via market sources (municipal bonds, bank loans, PPPs) — expected to drive ₹4 lakh crore in total urban investment over five years.

A ₹5,000 crore Credit Repayment Guarantee Scheme supports first-time market finance access for smaller ULBs and cities in Northeastern/hilly states, guaranteeing up to ₹7 crore or 70% of first-time loans.