Urban Infrastructure Development Fund

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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