New Delhi: Even as the next budget is days away from being unveiled and the financial year a few months from coming to a close, the Union government is reportedly yet to operationalise a Rs 1 lakh crore fund it announced in February 2025 to improve infrastructure in urban areas.In her budget speech for the 2025-26 fiscal made in February last year, Union finance minister Nirmala Sitharaman announced that the government would set up an ‘Urban Challenge Fund’ worth Rs 1 lakh crore to help develop “cities as growth hubs”, redevelop brownfield sites in cities and promote water supply and sanitation projects in 100 cities, which were objectives she had laid out in her July 2024 address.The fund would finance up to a quarter of the cost of bankable projects as long as at least half the total cost would be funded through bonds, bank loans and public-private partnerships, Sitharaman said. The government in its demands for grants budgeted Rs 10,000 crore for the fund for 2025-26.However, over 11 months later the fund has not been operationalised, the Economic Times reported, citing sources as saying that although the housing and urban affairs ministry has ‘prepared the project pipeline’, the cabinet is yet to approve the government’s fund guidelines that the newspaper noted were finalised in October.“Proposals from at least 15 states are in. We should be able to start the process of fund allocation once the Cabinet approval comes in,” ET quoted an unnamed senior ministry official as saying.According to the housing and urban affairs ministry, the fund’s monies would be intended for the “augmentation/upgradation/retrofitting and improving” of urban infrastructure “including [in] Tier-2 and Tier-3 cities”. The government’s goal of developing “cities as growth hubs” involves “economic and transit planning” as well as the “orderly development of peri-urban areas”, Sitharaman had said in 2024.When asked in parliament for details of the urban challenge fund’s implementation, including the status of projects proposed to the government, minister of state Tokhan Sahu last month only said that “schemes for UCF … are under consideration” and that “after approval of the schemes, the eligibility norms and participation criteria will be finalised and proposals will be invited”.The fund is among a number of announcements made in the 2025-26 budget that remain unimplemented or are partially operationalised.