G.O. (Ms.) No. 89, State Urban Infrastructure Development Fund, 2022

What the government order does

The Government of Tamil Nadu, Municipal Administration and Water Supply (MA2) Department issued G.O. (Ms.) No. 89, dated 17 June 2022, to transform the Metropolitan Infrastructure Development Fund into the State Urban Infrastructure Development Fund. The expanded fund can finance Urban Local Bodies across Tamil Nadu instead of remaining restricted by the earlier metropolitan focus.

Tamil Nadu Urban Finance and Infrastructure Development Corporation Limited is the nodal financing body described in the government order. The expanded fund is intended to provide soft loans and help Urban Local Bodies meet their required contributions for infrastructure programmes, including Atal Mission for Rejuvenation and Urban Transformation 2.0.

Background to the fund

The Metropolitan Infrastructure Development Fund originated from the revolving fund created under the Mega City Programme. That programme initially covered infrastructure projects within the Chennai Metropolitan Area and was phased out after December 2005.

The government order records the following position:

• The revolving fund had accumulated Rs.1,978.27 crore.
• Financial assistance of Rs.1,156.47 crore had been sanctioned from the fund for 34 projects.
• Rs.813.60 crore had been released to implementing agencies.
• Earlier assistance covered the Greater Chennai Corporation, Chennai Metropolitan Water Supply and Sewerage Board, municipalities and town panchayats.

The proposal also records earlier lending rates of 5% for service projects with a 15 year repayment period, 6% for cost recovery projects, and 7% for commercial projects with a 10 year repayment period.

Projects and bodies affected

The State Urban Infrastructure Development Fund is relevant to all Urban Local Bodies in Tamil Nadu and to agencies implementing urban infrastructure projects. Identified infrastructure needs include:

• Water supply, sewerage and septage management.
• Solid waste management.
• Bus stands, markets and shandies.
• Crematoria.
• Rejuvenation of water bodies and urban aquifer management.
• Recycling and reuse of treated wastewater.

The expanded fund also supports the wider infrastructure objectives associated with Kalaignar Nagarpura Mempattu Thittam, Singara Chennai 2.0 and Vision 2031.

Relevance to property owners and buyers

G.O. (Ms.) No. 89 concerns financing for Urban Local Bodies and public infrastructure. It does not set out changes to individual land ownership, registration or property documents. Property owners and buyers may be affected indirectly where funded projects improve water supply, sewerage, waste management, transport facilities, markets or other local infrastructure.