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About The Urban Infrastructure Development Fund (UIDF)


Officials from the Union Housing and Urban Affairs Ministry recently said the first tranche of loans to fund ongoing projects in tier-2 and tier-3 cities – under the Urban Infrastructure Development Fund (UIDF) will likely be disbursed soon.


GS III: Indian Economy

Dimensions of the Article:

  1. Urban Infrastructure Development Fund (UIDF)
  2. Rural Infrastructure Development Fund (RIDF)

Urban Infrastructure Development Fund (UIDF)

  • The UIDF will be created using priority sector lending shortfall and will be managed by the National Housing Bank.
  • The fund will provide resources for public agencies to create urban infrastructure in tier-2 and tier-3 cities.
  • The UIDF will be established on the lines of the Rural Infrastructure Development Fund (RIDF).
  • States will be encouraged to access the UIDF by leveraging resources from the 15th Finance Commission grants and other existing schemes.
Classification of Cities:
  • Tier-2 cities: Cities with a population between 50,000 to 100,000
  • Tier-3 cities: Cities with a population between 20,000 to 50,000

Rural Infrastructure Development Fund (RIDF)

  • The RIDF was established by the government in 1995-96 for financing ongoing rural infrastructure projects.
  • The Fund is managed by the National Bank for Agriculture and Rural Development (NABARD).
  • Domestic commercial banks contribute to the Fund to fulfill their shortfall in priority sector lending to agriculture.
  • The main objective of the RIDF is to provide loans to state governments and state-owned corporations for completing ongoing rural infrastructure projects.
  • The loan must be repaid in equal annual installments within seven years from the date of withdrawal, with a grace period of two years.

-Source: The Hindu

February 2024