The Urban Infrastructure Development Fund, commonly known as UIDF, is an initiative designed to enhance urban infrastructure in Tier 2 and Tier 3 cities throughout India. With an allocation of ₹10,000 crore, this fund aims to provide a reliable source of financing for various infrastructure projects managed by state agencies, municipal corporations, and urban local bodies.
UIDF is inclusive, covering a total of 459 Tier 2 cities, which have populations ranging from 1 lakh to 99,99,999, and 580 Tier 3 cities, with populations between 50,000 and 99,999. This ensures that a significant number of smaller urban areas can benefit from improved infrastructure.
Projects eligible for UIDF financing include:
State governments and Union Territories can apply for UIDF funding by submitting project proposals valued between ₹5 crore and ₹100 crore by the end of September each year. This process facilitates targeted infrastructure improvement tailored to local needs.
The funding provided through UIDF is structured as a loan, covering 75% to 90% of the total project cost. Importantly, state governments are responsible for any cost overruns and must repay the loan in five equal installments over a seven-year period.
The primary goal of UIDF is to transform mid-sized cities into regional economic hubs. By improving infrastructure, these cities can attract investment and enhance the quality of life for their residents.
Experts recommend that cities be granted greater flexibility in utilizing UIDF funds. Additionally, there is a call for better planning to leverage these funds for broader economic development. Utilizing financial instruments like credit guarantees rather than traditional loans could help maximize the fund's impact.
It's essential to note that UIDF does not finance housing, transport, education, health infrastructure, or administrative expenses. This focus ensures that funds are directed solely toward improving urban infrastructure.
All projects funded by UIDF must commence within 12 months of approval and be completed within three to five years. If projects are not initiated within 18 months of sanction, funding may be withdrawn, ensuring accountability and timely execution.
In addition to UIDF, the central government plans to launch a city bus augmentation scheme, allocating ₹18,000 crore to procure 20,000 buses. This initiative aims to enhance public transport in Tier 2 and Tier 3 cities, further supporting urban mobility.
Q1. What is the purpose of the Urban Infrastructure Development Fund (UIDF)?
Answer: UIDF aims to provide a stable financing source for urban infrastructure projects in Tier 2 and Tier 3 cities, enhancing their development and living standards.
Q2. How can state governments utilize UIDF funding?
Answer: State governments can submit project proposals between ₹5 crore and ₹100 crore by September-end for funding under UIDF.
Q3. What types of projects are funded by UIDF?
Answer: UIDF supports projects such as water supply systems, sewerage networks, solid waste management, and area development initiatives.
Q4. What is the repayment structure for UIDF loans?
Answer: Loans are repaid in five equal installments within seven years, covering 75% to 90% of the total project cost.
Q5. Are there projects that UIDF does not cover?
Answer: Yes, UIDF does not finance housing, education, transport, health infrastructure, or administrative costs.
Question 1: What is the main aim of the Urban Infrastructure Development Fund (UIDF)?
A) To provide loans for housing projects
B) To enhance urban infrastructure in Tier 2 and Tier 3 cities
C) To support agricultural development
D) To fund educational institutions
Correct Answer: B
Question 2: How many Tier 2 cities are covered under the UIDF?
A) 500
B) 459
C) 380
D) 600
Correct Answer: B
Question 3: What percentage of the total project cost does UIDF cover?
A) 50% to 70%
B) 75% to 90%
C) 100%
D) 40% to 60%
Correct Answer: B
Question 4: Which type of project is excluded from UIDF funding?
A) Solid waste management
B) Water supply projects
C) Health infrastructure
D) Bridge construction
Correct Answer: C
Question 5: What is the repayment period for loans under UIDF?
A) 3 years
B) 5 years
C) 7 years
D) 10 years
Correct Answer: C
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