Urban Infrastructure Development Fund

About Urban Infrastructure Development Fund:

• Itis established through the use of priority sector lending shortfall.
• Purpose: The Fund will be used by public agencies to create urban infrastructure in tier-2 and tier-3 cities.
• It aims to supplement the efforts of the State Governments / UTs for urban infrastructure development works implemented through Public/ State Agencies, Municipal Corporations and Urban Local Bodies, by providing a stable and predictable source of financing for providing basic services like Sewerage and Solid Waste Management, Water Supply and Sanitation, construction and improvement of drains/ storm water drains, etc.
• It is managed by the National Housing Bank.
• The initial corpus for this Fund is ₹10,000 crore.
• It is established on the lines of the Rural Infrastructure Development Fund (RIDF).
• 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.
• It currently covers 459 tier-2 cities and 580 tier-3 cities. 
• UIDF Loans:
  • The interest rate on UIDF loans has been kept at Bank Rate minus 1.5 per cent.
  • The loan (Principal) will be repayable in five equal annual instalments within seven years from the date of draw, including a moratorium period of two years.
  • Interest will be payable on a quarterly basis.

Q1: What is National Housing Bank (NHB)?

NHB is an All-India Financial Institution (AIFl) established under the National Housing Bank Act, 1987. It is wholly owned by the Government of India.

News: ESTABLISHMENT OF URBAN INFRASTRUCTURE DEVELOPMENT FUND

‹ ›