Centre Lays Out Path for States to Tap ₹18,000 Cr for Urban Planning Reforms.

In a significant move to propel comprehensive urban planning reforms and foster development nationwide, the Union government late last month issued detailed guidelines for states and Union Territories (UTs) to access a special assistance fund of ₹18,000 crore for capital investment in the upcoming fiscal year 2025-26.

The initiative is strategically designed to incentivize states to undertake critical reforms aimed at improving urban governance, strengthening municipal finance, streamlining urban land management, and enhancing the ease of doing business within their respective jurisdictions.

The Ministry of Finance (MoF), in a communication dated May 22 to the chief secretaries of all states and UTs, clarified that the funds would be disbursed as incentives for capital investment. These disbursements will be made based on the recommendations of the Ministry of Housing and Urban Development, ensuring that the financial assistance directly supports tangible urban improvement projects.

To facilitate effective implementation and tailored support, the 31 states and UTs eligible for this special assistance have been categorized into three distinct groups. This categorization is expected to allow for a more targeted approach in guiding and supporting reforms across varying levels of urban development and administrative capacities. The Centre's move underscores its commitment to modernizing India's urban landscape and creating more sustainable and business-friendly cities.