Union Minister of Housing and Urban Affairs Manohar Lal Khattar announced that starting in September, 30% of the ₹1 lakh crore (approximately $12 billion USD) Urban Challenge Fund (UCF) will be released to cities for various urban development projects. The UCF, introduced in last year’s budget, aims to address urban challenges through market-based financing, with a total investment of ₹4 lakh crore (approximately $48 billion USD) planned from FY 2025-26 to FY 2030-31, extendable by three years. The funding model allows the Centre and states to cover 25% of project costs, while the remaining funds must be sourced through bonds, loans, or private participation. The guidelines released emphasize community involvement, allowing local organizations to mobilize private investments for urban utilities. Additionally, urban local bodies (ULBs) can designate private entities as Special Purpose Urban Infrastructure Managers (SPUIM) to oversee large-scale development projects. Khattar highlighted that states will be allocated funds based on their urban population size, with a warning that those with slower implementation may lose out on funding opportunities. The UCF will support a wide range of projects, including digital governance, infrastructure development, sustainability initiatives, and urban decongestion measures, ultimately aiming to improve livability in urban areas.