Union Cabinet Approves ₹1 Lakh Crore Urban Challenge Fund to Transform Indian Cities

• Feb 14 , 2026

New Delhi, February 14, 2026

The Union Cabinet on Friday approved the ₹1 lakh crore Urban Challenge Fund (UCF) aimed at addressing the challenges posed by rapid urbanisation across India. Information and Broadcasting Minister Ashwini Vaishnaw said the UCF will focus on “creative redevelopment of cities, positioning them as growth hubs” while strengthening water and sanitation systems to create modern, market-linked urban infrastructure. The centrally sponsored scheme will provide ₹1 lakh crore in central assistance from FY 2025-26 to FY 2030-31, extendable by three years.

Vaishnaw explained that the Centre’s contribution will be capped at 25% of project costs, while at least 50% will be mobilised from market sources such as loans, bonds, or public-private partnerships. The remaining 25% will come from states, Union territories, or urban local bodies. “With ₹1 lakh crore investment from the government of India, more than ₹3 lakh crore...