Urban Infrastructure Development Fund

Policy: The Urban Infrastructure Development Fund (UIDF)

Objective: The UIDF, announced in the 2023-24 Union Budget, is designed to bolster infrastructure in India’s Tier-2 and Tier-3 cities.
Funding: Allocated Rs 10,000 crore, it aims to bridge gaps in essential services and urban development.
Implementation: Managed jointly by the Ministry of Housing and Urban Affairs and the Ministry of Finance.

Need: Addressing Urban Infrastructure Deficits

Target Areas: Focus on cities with populations ranging from 50,000 to 99,99,999.
Key Projects: Emphasis on developing water treatment plants, sewage systems, roads, parks, and other urban necessities.
Rationale: To match the growing urban population and prevent infrastructural lag in smaller cities.

Progress: Current Status and Challenges

Submissions: Till the first week of December 2023, proposals worth Rs 650 crore received, far less than the available funds.
Sanctions: Only a fraction of the submitted proposals, worth about Rs 250 crore, have been sanctioned.
Reasons for Slow Progress:

Delayed Guidelines: Official guidelines were issued only in July, causing delays in project submissions.
Evaluation Process: The process of evaluating and approving projects is intricate and time-consuming.
State Participation: Limited to eight states currently, indicating a need for wider engagement.
Project Identification: States need time to identify suitable projects and prepare detailed reports.

Conclusion

While the UIDF is a significant step towards enhancing urban infrastructure in smaller Indian cities, its impact is currently limited due to slow implementation and underutilization of funds. Streamlining the project submission and approval processes, and encouraging broader state participation, are crucial for realizing the fund’s full potential.

SRIRAM’s