The Union Budget 2025 focuses on urban development and infrastructure expansion, ensuring smart city growth, sustainable urbanization, and efficient municipal services. The government has introduced new initiatives to modernize cities, boost housing, and enhance urban mobility.
Key Announcements
1. ₹1 Lakh Crore Urban Challenge Fund
- A dedicated ₹1 lakh crore fund will be established to support urban infrastructure projects.
- Funding to be allocated based on a competitive selection process for cities.
- Aims to enhance water and sanitation infrastructure, creative city redevelopment, and growth hubs.
2. Extension of Jal Jeevan Mission Until 2028
- 15 crore households already provided with tap water connections since 2019.
- Mission extended until 2028 to ensure 100% coverage.
- Focus on infrastructure quality and long-term sustainability through state-level agreements.
3. Expansion of Affordable Housing – SWAMIH Fund 2
- SWAMIH Fund 2 launched with ₹15,000 crore to complete 1 lakh stalled housing units.
- Builds on the success of SWAMIH Fund 1, which completed 50,000 units.
- Supports middle-class homebuyers paying EMIs while awaiting property completion.
4. Strengthening Urban Governance and Municipal Reforms
- Governance reforms to improve municipal services and urban land management.
- New policies for transparent urban planning, zoning, and public service efficiency.
- Performance-linked incentives for states based on urban development benchmarks.
5. Power & Energy Reforms for Urban Areas
- Electricity distribution reforms to improve the financial health of urban power companies.
- Additional 0.5% borrowing flexibility for states, contingent on electricity sector reforms.
- Investment in intra-state transmission capacity for enhanced power reliability.
6. Boosting Public Transport & Smart Mobility
- Expansion of metro rail and mass rapid transit systems (MRTS) in Tier-2 cities.
- Investment in EV charging stations and sustainable urban transport solutions.
- Traffic management digitization for improved city logistics and road safety.
Impact of These Measures
1. Improved Urban Living Standards
- Smart city upgrades will ensure cleaner, more efficient urban spaces.
- Affordable housing initiatives will support homebuyers and boost real estate.
2. Strengthening Infrastructure & Sustainability
- Enhanced water and sanitation infrastructure will improve urban health and hygiene.
- Urban transport expansion will reduce traffic congestion and emissions.
3. Job Creation & Economic Growth
- Infrastructure projects will generate employment in construction and urban services.
- Revamped municipal services will attract private investment and improve governance.
Conclusion
The Union Budget 2025 lays out a transformative vision for urban development, integrating sustainability, smart technology, and efficient governance. With substantial investments in infrastructure, housing, and transport, India’s cities are set to become more livable, resilient, and growth-oriented, aligning with the vision of Viksit Bharat (Developed India).