Telangana is expected to receive Central assistance of around ₹3,375 crore under the Urban Challenge Fund of the Centre, with potential allocations ranging between ₹3,600 crore and ₹4,000 crore, and to maximise these allocations, Telangana would need to prepare bankable projects worth between ₹13,500 crore and ₹16,000 crore, according to Bhongir MP Chamala Kiran Kumar Reddy.

He said that Telangana, which accounts for nearly 4% of India’s urban population, is projected to become almost 50% urbanised in the coming years, making investments in urban infrastructure a critical priority. Participating in a meeting of the Parliamentary Standing Committee on Housing and Urban Affairs in New Delhi, he raised concerns over the preparedness of Urban Local Bodies (ULBs) to effectively access and utilise funding available under the Centre’s proposed ₹ 1 lakh crore Urban Challenge Fund (UCF).

However, Telangana due to CM Revanth Reddy’s initiatives, has already secured approval for Central assistance of ₹1,420 crore against projects worth ₹5,681 crore for the cities of Warangal, Khammam and Karimnagar during the first National Advisory Committee meeting. He added that the State has also proposed a dedicated Tier-III city project pipeline worth ₹ 7,800 crore, with several additional proposals currently under preparation. Mr Kiran Kumar Reddy said many municipalities lack the technical expertise and awareness required to develop bankable projects, access diverse financing options and secure loans at competitive interest rates. He urged the Centre to introduce targeted capacity-building programmes and financial advisory support to help urban local bodies effectively leverage the opportunities offered by the UCF.

The UCF is a flagship initiative proposed by the Union government to support projects under the themes of Cities as Growth Hubs, Creative Redevelopment of Cities, and Water & Sanitation. Under the funding model, the Centre will provide up to 25% of project financing, while the remaining resources are expected to be mobilised through municipal bonds, bank loans and public-private partnerships.