New Delhi: Nirmala Sitharaman, Minister of Finance said in her Budget speech for financial year 2023–2024 on Wednesday that the Central Government will establish an Urban Infrastructure Development Fund (UIDF) of ₹10,000 crore per year to be utilised for building infrastructure in Tier-2 and Tier-3 cities across the nation.
According to the finance minister, the fund will be established using priority sector lending shortfall. She said, “This will be managed by the National Housing Bank and will be used by public agencies to create urban infrastructure in Tier-2 and Tier-3 cities. States will be encouraged to leverage resources from the grants of the 15th Finance Commission, as well as existing schemes, to adopt appropriate user charges while accessing the UIDF. We expect to make available ₹10,000 crore per annum for this purpose.”
Minister Sitharaman said that states and cities will be urged to make changes to urban planning and take action to make cities more sustainable. This would include opportunities for all, efficient use of land resources, enough resources for urban infrastructure, transit-oriented development, and increased availability and affordability of urban land.
The reforms would include ring-fencing user fees on urban infrastructure and property tax governance. She said that cities would receive incentives to increase their creditworthiness for municipal borrowing.
She said that all cities and municipalities would be able to switch from manhole to machine-hole mode for the complete mechanical de-sludging of septic tanks and sewers. For the scientific management of dry and moist waste, increased attention will be given.