Shimla, April 26 (PTI) Himachal Pradesh Government has proposed projects of over Rs 5,400 crore under the Urban Challenge Fund to create robust infrastructure and vibrant economic hubs in urban areas, said Public Works and Urban Development Minister Vikramaditya Singh.
In a meeting held under the chairmanship of Union Minister for Housing and Urban Affairs Manohar Lal Khattar in New Delhi on Saturday evening, Singh requested the earmarking of Rs 1,350 crore to the state as the Centre’s share, an official statement on Sunday said.
Highlighting the limited private-sector participation in the redevelopment projects due to terrain-related constraints and lower commercial viability, Singh demanded relaxations for hill and special category states like
Himachal Pradesh under the Urban Challenge Fund.
In February, the Centre had approved the Rs 1 lakh crore Urban Challenge Fund (UCF) to transform city infrastructure across India through reform-driven projects from FY 2025-26 to FY 2030-31. The scheme focuses on reforming Urban Local Bodies (ULBs) for bankable, sustainable projects in sanitation, mobility, and city redevelopment.
The scheme mandates a 25 per cent central funding contribution, while 50 per cent must be raised from the market and 25 per cent from state/local bodies.
Singh stressed the need for modification of the funding pattern by reducing the mandatory requirement of mobilising 50 per cent of the project cost through bonds, bank loans and PPPs. He also sought the Centre’s support in facilitating resource mobilisation for the state.
In view of the limited financial capacity of Urban Local Bodies and low private sector participation in hill regions, Singh urged for a higher proportion of Central assistance while finalising the modalities, the statement said.
Singh highlighted that the UCF is of critical importance for a hill state like Himachal Pradesh, where nearly 90 per cent of the area is mountainous, and about 67 per cent is under forest cover, leaving limited land for development.
Urbanisation is further constrained by fragile ecology and rapidly rising tourist footfall, which places immense pressure on limited infrastructure, he said.
He said that the UCF is not merely financial support but a key enabler for developing resilient growth centres, supporting tourism, generating employment and improving quality of life.
He apprised that the state government has prepared a set of integrated, climate-resilient and tourism-oriented urban infrastructure projects for support under the UCF, which include decongestion and redevelopment of core areas.
The state government has proposed mobility solutions tailored for hill towns, such as hydraulic parking and lifts, and redevelopment of traditional market areas to modernise infrastructure, improve safety and boost local economic activity, the statement said.
He said that the government was also proposing an Integrated Wellness Eco-tourism Centre with a skywalk, aligning with India’s wellness tourism vision while ensuring minimal ecological impact.
The minister sought support for planned townships, which will attract private investment and reduce pressure on existing hill towns.
He said that urban governance was being strengthened through Integrated Command and Control Centres, which are critical for disaster response, traffic management and efficient delivery of citizen services.
However, the Centre has requested the Himachal government to prioritise the projects and submit projects worth 1,100-1,200 crores under which 25 per cent of the amount will be released as central assistance and the remaining funds the state has to mobilise through PPP or loans from financial institutions. PTI BPL SHS SHS
