The Union Cabinet on Friday (February 13, 2026) approved the launch of the ‘Urban Challenge Fund’ (UCF), a new Centrally sponsored scheme of the Ministry of Housing and Urban Affairs, with a total Central assistance of ₹1 lakh crore. It aims to support transformative and bankable urban projects through competitive “challenge-mode” as urban infrastructure cannot be funded by public finance alone. It gives effect to the government’s vision, announced in the Union Budget 2025-26, to implement proposals relating to ‘Cities as Growth Hubs’, ‘Creative Redevelopment of Cities’, and ‘Water and Sanitation’. There will be a strong thrust on reforms across urban governance, market and financial systems, operational efficiency, and urban planning, the statement said. A dedicated ₹5,000 crore corpus will enhance the creditworthiness of 4,223 cities, including Tier 2 and Tier 3 cities, particularly for first-time access to market finance.

Source: The Hindu February 14, 2026 18:42 UTC