Urban Challenge Fund: ₹1 Lakh Crore Plan and CRGSS Guarantee
Why in the news
The Urban Challenge Fund and its Credit Repayment Guarantee Sub-Scheme (CRGSS) shift urban finance from grants to market-linked funding that makes Urban Local Bodies (ULBs) market-ready.
Key facts
- UCF is a catalytic instrument: the Centre bears just 25% so private investors and banks find projects bankable.
- Period: FY 2025-26 to FY 2030-31.
- 4x leverage: ₹1 lakh crore seed to aim for ₹4 lakh crore total spending.
| Component | Amount | Use |
|---|---|---|
| Project funding | ₹90,000 crore | Infrastructure capital, up to 25% of project cost |
| Capacity building | ₹5,000 crore | DPRs and better city credit ratings |
| CRGSS | ₹5,000 crore | Safety net for lenders in smaller or riskier cities |
About CRGSS
- Gives guarantees to lenders such as banks and financial institutions.
- Targets Tier-II and Tier-III cities, hilly areas and the North-East, which lack the credit ratings of metros like Mumbai or Hyderabad.
Exam angle
- Central share cap: 25%; outlay split 90,000 + 5,000 + 5,000 crore.