UIDF to be established, cities to get incentives to improve creditworthiness
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Moving forward on the urban transformation, the Union Budget 2023-24 is set to encourage states to undertake urban planning reforms and actions to transform cities into 'sustainable cities of tomorrow', and Urban Infrastructure Development Fund (UIDF) will be set up.
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 said by Union Finance Minister Nirmala Sitharaman while presenting the Union Budget 2023-24 in Parliament on Wednesday.
The Minister 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.
The Finance Minister said that the cities will be incentivized to improve their creditworthiness for municipal bonds. This will be done through property tax governance reforms and ring-fencing user charges on urban infrastructure.
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.
