'Expedite loan sanction, disbursement for projects under Rs 10,000-cr UIDF'

Financial Services Secretary Vivek Joshi on Monday asked officials to expedite sanction and disbursement of loans to eligible projects under Rs 10,000-crore urban infrastructure development fund (UIDF) announced in Budget.

The early sanction and disbursement will help create better infrastructure in Tier 2 and Tier 3 cities, he said at an event organised to mark the 35th anniversary of National Housing Bank (NHB).

Finance Minister Nirmala Sitharaman in her 2023-24 Budget speech announced the setting up of UIDF through the use of priority sector lending shortfall for the creation of urban infrastructure in Tier 2 and Tier 3 cities.

Mid-tier cities still face the challenge of urban planning and funding for their urban infrastructure and ensuring planned development.

Keeping these challenges in mind, UIDF has been launched with an initial corpus of Rs 10,000 crore to supplement efforts of the state governments by providing stable and predictable source of finance for creation of urban infrastructure in Tier 2 and Tier 3 cities.

Interest rate on UIDF loans has been kept at bank rate minus 1.5 per cent, i.e., 5.25 per cent at present, the statement said giving further details of the scheme.

Speaking at the event, Housing and Urban Affairs Secretary Manoj Joshi emphasised on the need for convergence of UIDF with other urban missions of the government of India.

He advised state government officials to prioritise ongoing projects in the initial years for better utilisation of allocated funds and faster completion of projects while pipeline of new eligible projects are built simultaneously.

Referring to the launch of 'Housing for All' mission as a major milestone in Indian housing, the financial services secretary underlined 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.

Dwelling on the series of initiatives and interventions taken by the government of India, Reserve Bank of India and NHB over the years, he appreciated the role played by NHB through its accelerated refinance operations to support the housing finance institutions steer through the pandemic undeterred.

Meanwhile, NHB opened five new regional offices at Jaipur, Chandigarh, Raipur, Patna and Bhubaneswar.