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Budget 2025-26: Rs 1 lakh crore fund to transform cities

2025-02-01

Union Finance Minister, Nirmala Sitharaman announced that the government will create a Rs 1 lakh crore Urban Challenge Fund aimed at transforming cities into growth hubs. The fund will finance 25 per cent of the cost of bankable projects, with an allocation of Rs 10,000 crore for 2025-26. The remaining 50 per cent will be funded through bonds, bank loans, and public-private partnerships (PPPs). “This is fuel the ongoing momentum in rebuilding urban infrastructure and will drive greater demand for real estate in the urban and semi urban areas,” said Vimal Nadar, Head of Research at Colliers India.

Also, the SWAMIH fund 2 was announced with blended financial 15000 crores for another 1 lakh units which will give the required boost to the affordable housing sector.

Jatin Shah, Chief Strategy Officer, Colliers India said, “ The push for Global Capacity Centres in tier 2 cities will boost real estate in these areas, making them prime locations for future company expansions.”

The PM Gati Shakti aims to make data accessible to the private sector to optimise planning and reduce costs. This move is expected to enhance infrastructure development and boost economic growth by leveraging private sector expertise. Additionally, the development of the top 50 tourist destinations will be carried out in partnership with state governments. This collaboration aims to promote sustainable tourism, create employment opportunities, and boost local economies.