URBAN INFRASTRUCTURE DEVELOPMENT FUND TO BE ESTABLISHED
INCENTIVES FOR CITIES TO IMPROVE CREDIT WORTHINESS FOR MUNICIPAL BONDS
100 PER CENT MECHANICAL DESLUDGING OF SEPTIC TANKS TO BE ENABLED IN CITIES AND TOWNS

States and cities will be encouraged to undertake urban planning reforms and actions to transform cities into ‘sustainable cities of tomorrow’. This means efficient use of land resources, adequate resources for urban infrastructure, transit-oriented development, enhanced availability and affordability of urban land, and opportunities for all. This was stated by Union Finance & Corporate Affairs Minister Smt Nirmala Sitharaman while presenting the Union Budget 2023-24 in the Parliament here today.

Urban Infrastructure Development Fund

Smt. Sitharaman mentioned that an Urban Infrastructure Development Fund (UIDF) will be established through use of priority sector lending shortfall. 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.

Making Cities Ready for Municipal Bonds

The Finance Minister said that the cities will be incentivized to improve their credit worthiness for municipal bonds. This will be done through property tax governance reforms and ring-fencing user charges on urban infrastructure.

Urban Sanitation

All cities and towns will be enabled for 100 per cent mechanical desludging of septic tanks and sewers to transition from manhole to machine-hole mode. Enhanced focus will be provided for scientific management of dry and wet waste.

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Urban Infrastructure Development Fund: priority sector lending shortfall to finance city projects and improve municipal bond creditworthiness. An Urban Infrastructure Development Fund will be created by utilising priority sector lending shortfall, to be managed by a designated financial institution and used by public agencies to build urban infrastructure in Tier 2 and Tier 3 cities; cities will be incentivized to enhance municipal bond creditworthiness via property tax governance reforms and ring-fencing of user charges; urban sanitation will move to 100 per cent mechanical desludging and emphasise scientific dry and wet waste management.