Chief Minister Devendra Fadnavis has proposed the establishment of an ‘Urban Challenge Fund’ to boost cities as drivers of growth and remove obstacles hindering their advancement. Fadnavis expressed confidence in this initiative, believing it will enhance civic infrastructure and services in urban areas. The financial structure of the fund, discussed in a meeting he chaired, outlines a total project fund of Rs 90,000 crore.
The proposed fund aims to mobilize Rs 44,800 crore for Maharashtra, with contributions from the Central Government, State Government, and market-based mechanisms. Fadnavis highlighted Maharashtra’s successful efforts in raising capital for local projects, citing examples from Nashik and Pune Municipal Corporations. These endeavors, focused on water supply and sanitation, have received approval from the National Executive Committee.
The Urban Challenge Fund is designed to address delays in infrastructure projects caused by financial and administrative constraints. It will enable cities to raise capital through municipal bonds and Public-Private Partnerships. The fund will cover various areas such as digital governance, infrastructure development, traffic management, connectivity, urban revitalization, and water supply projects, among others.
Fadnavis’ proposal for the ‘Urban Challenge Fund’ follows the Sixth Maharashtra Finance Commission’s report, which recommends an increased annual devolution of the State’s Own Tax Revenue to local bodies. This shift towards financial decentralization will allocate 55% to Urban Local Bodies and 45% to Rural Local Bodies, with specific provisions for performance grants and rural-urban transition management.
