Guidelines for UIDF likely to be released by March-end
- March 6, 2023
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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Guidelines for UIDF likely to be released by March-end
Subject : Economy
Section: Infrastructure
Concept :
- The Urban Infrastructure Development Fund, created for the growth of Tier II and Tier III cities, should focus on the ongoing projects for the effective utilisation of funds; must provide for basic services; and encourage projects with lower carbon footprints.
- These are among the slew of likely guidelines to be released for operationalising the UIDF scheme, which was announced in this year’s General Budget with an annual allocation of ₹10,000 crore.
About Urban Infrastructure Development Fund (UIDF):
- UIDF will be established through the use of priority sector lending shortfall.
- The fund will be used by public agencies to create urban infrastructure in tier-2 and tier-3 cities.
- It will be managed by the National Housing Bank.
- It will be established on the lines of the Rural Infrastructure Development Fund (RIDF).
- States will be encouraged to leverage resources from the grants of the 15th Finance Commission, as well as existing schemes, to adopt appropriate user charges while accessing the UIDF.
- Cities with a population in the range of 50,000 to 100,000 are classified as tier 2 cities, while those with a population of 20,000 to 50,000 are classified as tier 3 cities.
Rural Infrastructure Development Fund (RIDF)
- The RIDF was set up by the Government in 1995-96 for financing ongoing rural Infrastructure projects.
- The Fund is maintained by the National Bank for Agriculture and Rural Development (NABARD).
- Contribution: Domestic commercial banks contribute to the Fund to the extent of their shortfall in stipulated priority sector lending to agriculture.
- Main Objective: To provide loans to State Governments and State-owned corporations to enable them to complete ongoing rural infrastructure projects.
- Loan to be repaid in equal annual installments within seven years from the date of withdrawal, including a grace period of two years.