In a significant move to accelerate infrastructure development in small towns, the Maharashtra government has approved a new scheme to provide funding through loans. The decision was made at a cabinet meeting on Wednesday, chaired by Chief Minister Eknath Shinde.

The Maharashtra Urban Infrastructure Fund (MUIF) will raise the necessary funds through open market loans. This initiative, known as the Maharashtra Urban Infrastructure Development Loan Scheme, will enable urban local bodies to secure their share of funding. The scheme is designed to assist urban bodies that are ineligible for other loans.

To ensure repayment, if urban local bodies fail to repay the loan, the government will directly deduct the loan and interest amounts from their GST grants, Finance Commission grants and stamp duty refunds. This new funding mechanism is expected to significantly boost infrastructure projects in small towns across Maharashtra, ensuring faster and more efficient development.

AMRUT-2 scheme

Under the Central government’s AMRUT-2 scheme, the Chhatrapati Sambhajinagar Municipal Corporation’s approved water supply project requires a contribution of ₹822.23 crore. This amount will be approved as a loan by the Maharashtra Urban Infrastructure Development Company Ltd (MUIDCL) and MUIF. If necessary, the government will provide advance funds to these bodies, which must be reimbursed to the government by MUIDCL and MUIF, once the loan is raised, mentioned the statement issued by the State government.