Akash Jha
On Monday, the Secretary of Financial Services, Vivek Joshi, requested that officials speed the process of sanctioning and disbursing loans to qualifying projects as part of the Rs 10,000 crore urban infrastructure development fund (UIDF) that was announced in the Budget.
In a speech delivered at a celebration to honor the 35th anniversary of the National Housing Bank (NHB), Joshi stated that the early sanctioning and disbursement of loans will assist in the development of improved infrastructure in Tier 2 and Tier 3 cities.
During her 2023-24 Budget speech, Finance Minister Nirmala Sitharaman announced the establishment of the Urban Infrastructure Development Fund (UIDF) by the utilization of priority sector loan deficit for the purpose of developing urban infrastructure in Tiers 2 and 3. The challenges of urban planning, funding their urban infrastructure, and assuring the development of their cities in a planned manner are still obstacles that mid-tier cities must overcome.
In light of these issues, the Urban Infrastructure Development Fund (UIDF) was established with an initial capital of ten thousand billion rupees (Rs. 10 billion) to complement the efforts of state governments by supplying a reliable and dependable source of financing for the development of urban infrastructure in Tier 2 and Tier 3 cities.
According to the statement, the interest rate on UIDF loans has been maintained at the bank rate minus 1.5 percentage points, which results in a rate of 5.25 percentage points at the present time.
While Joshi was giving his speech at the ceremony, he emphasized how important it was for the UIDF to converge with other urban missions that the government of India had.
He gave the authorities of the state government the advice to prioritize ongoing projects over the first few years in order to make more efficient use of the funds that were allotted and to finish projects more quickly, all while simultaneously building a pipeline of new qualified projects.
The financial services secretary highlighted the remarkable growth in outstanding home loan of banks and housing finance companies (HFCs) from Rs 10 lakh crore in 2015, when Pradhan Mantri Awas Yojana was launched, to over Rs 28 lakh crore now. He referred to the launch of the ‘Housing for All’ mission as a major milestone in Indian housing.
Dwelling on the string of actions and interventions carried out over the course of the years by the government of India, the Reserve Bank of India, and the NHB, he expressed his gratitude for the role that the NHB had played through its rapid refinance operations in assisting the housing finance institutions in navigating their way through the epidemic without being derailed.
During this time, the NHB established five new regional offices in the following locations: Jaipur, Chandigarh, Raipur, Patna, and Bhubaneswar.
