Himachal seeks Rs. 1350 crore central share under Urban Challenge Fund
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SHIMLA 26 April, 2026
PWD and Urban Development Minister Vikramaditya Singh participated in a meeting held under the chairmanship of Union Minister for Housing and Urban Affairs Manohar Lal Khattar at New Delhi last evening. Detailed discussions were held on Urban Challenge Fund during the meeting.
Vikramaditya Singh said that the State Government has proposed projects amounting to approximately Rs. 5,400 crore under the Urban Challenge Fund to create robust infrastructure and vibrant economic hubs in urban areas of the State. He requested the earmarking of Rs. 1,350 crore to Himachal Pradesh as the Central Government share, keeping in view the small size and limited revenue base of Urban Local Bodies. He added that private sector participation in re-development projects remains limited due to terrain-related constraints and lower commercial viability. He also demanded specific relaxations for hill and special category states like Himachal Pradesh under the Urban Challenge Fund keeping in view these challenges.
He stressed upon suitable relaxation in the population criteria prescribed for coverage, and modification of the funding pattern by reducing the mandatory requirement of mobilizing 50 percent of the project cost through bonds, bank loans and PPPs. He urged for considering higher proportion of Central assistance or viability gap support while finalizing the modalities, keeping in view the limited financial capacity of Urban Local Bodies and low private sector participation in hill regions.
Vikramaditya Singh also sought the support of the Government of India in facilitating resource mobilization for the State under the Urban Challenge Fund, including enabling access to institutional finance and innovative funding mechanisms. Further, support in attracting private investment and credible developers through appropriate policy backing and handholding would be invaluable for successful project implementation, he added.
He said that the Urban Challenge Fund is of critical importance for a hill State like Himachal Pradesh where nearly 90 percent of the area is mountainous and about 67 percent is under forest cover, leaving limited land for development. Urbanization is further constrained by fragile ecology and rapidly rising tourist footfall which places immense pressure on limited infrastructure, he said.
He said that the Urban Challenge Fund is not merely financial support but a key enabler for developing resilient growth centres that support tourism, generate employment and improve quality of life.
