Rajasthan Urban Development Fund

Government of Rajasthan has established “Rajasthan Urban Development Fund” (RUDF) vide order no. F.(02)/RUIFDCO/RUDF/2010-10/5762 dated 26.03.2010. The Rajasthan Urban Development fund (RUDF) is a fund created by the Government of Rajasthan with two fold objectives to ensure comprehensive development of the urban areas across the state:

  • To financially support (Gap Funding) the Urban Local Bodies in execution of the projects sanctioned under various schemes.
  • To finance the new projects enhancing basic facilities in the urban areas.

In order to overcome the problems of lack of infrastructure in the municipal areas, and also to support the ULBs financially to bridge the gap in any of the projects sanctioned by the Government of India, State Government, others and any other suo-moto projects, the state government has decided to create the fund. The creation of this fund is one of the mechanisms which would help the ULBs in tackling their financial crisis partially for various ongoing and new projects.

The RUDF is being managed by Rajasthan Urban Infrastructure Finance & Development Organization (RUIFDCO) on behalf of the Government of Rajasthan. RUIFDCO charge 0.25% of the disbursable loan amount from the ULBs as administrative charges.

Objectives of RUDF will be as mentioned below:-

  1. To fund the gap in the projects which are under the flagship scheme of Government of India namely Jawahar Lal Nehru National Urban Renewal Mission, UIDSSMT, IHSDP, National Lake Conservation Plan and any other project (s)/ scheme(s) of Govt. of India & GoR.
  2. To provide seed capital to new innovative projects.
  3. To assist ULBs to obtain loan from banks and FIs.
  4. To assist ULBs in obtaining the government guarantees.
  5. To provide grant to the ULBs for executing specific projects in public interest.
  6. To provide bridge loan to the ULBs for interim period.
  7. To provide loan to companies like JCTSL, ACTSL or any other company formed for the purpose of providing services to the urban dwellers.
  8. To identify, develop and fund commercially viable projects which can generate revenue for the ULBs.
  9. Financial resource enhancement of ULBs by mobilizing resources for infrastructure projects using various financing instruments such as bonds/debentures, equity, pooled finance arrangements etc.
  10. To borrow or raise Fund / loans or receive grants or accept contributions to assist projects.
  11. To guarantee the performance of any contract or obligation and the payment of any mobilization of resources by the ULB(s).
  12. To assist the ULBs to obtain participation of non government sector in infrastructure projects through joint ventures on PPP mode.
  13. To create wealth from wealth assets of ULBs through new projects i.e. E-governance, non conventional source of energy, energy efficiency projects, waste to energy projects and projects under CDM, generating carbon credits etc.
  14. To finance projects of city development like sewerage, STPs, Solid waste Management, drainage and rain-water harvesting etc undertaken by Urban Improvement Trusts (UITs) and City Development Authorities.
  15. To finance any other projects of city development as deemed appropriate.
  16. To finance projects of city development like sewerage, STPs, Solid Waste Management, Drainage, Roads, Bridges, Buildings and Rain-water Harvesting etc. identified/undertaken by Urban Local Bodies (ULBs).
  17. To provide funds for consultancy works for Feasibility Reports, Master Plans, Survey Works, DPR Preparation and other similar activities undertaken centrally by the Department for one or more ULBs.

To provide funds as loans/grants to the ULBs for plans of Capacity Building including construction of office premises, procurement of equipments, training programmes for personnel or any other works/programmes which the Fund Management Committee (FMC) may deed fit.

Fund sharing Mechanism:

A total of Rs. 400.00 cr. is to be collected initially to raise this fund. The size of the fund has been increased from Rs. 400.00 cr. to Rs. 1000.00 cr.

Seed Capital:

a. Government of Rajasthan                      Rs. 375.00 Cr.

b. ULBs & UITs / FIs/ Bank                       Rs. 625.00 Cr.

Annual Contribution:

a. Annual Contribution by GoR

Government of Rajasthan provided Rs. 25 Crore during the financial year (2009-10) and Rs. 50 Crore during the next financial year (2010-11) as a contribution (grants) of state government in this fund. Balance amount of Government contribution will be provided during the ensuing years along with annual contribution as may be fixed by the government from time to time based on the performance of the fund.

b. Annual contribution by ULBs:

As an initial contribution from the municipalities Rs 25.00 Crores was transferred to the fund by the government from the devolution of the state finance commission. All ULBs, will contribute to RUDF an annual subscription.The remaining amount of fund will be borrowed from Financial Institution (FIs) and Banks as may be required from time to time.

Mechanism of loan disbursement:-

The disbursement of loan to Urban Local Bodies will be governed by the guidelines formulated for the purpose. The ULB seeking loan shall have to forward the application for loan duly completed in all respect enumerating the relevant details of the project along with audited balance sheet. The disbursement of loan from RUDF is subject to approval by the sanctioning Fund Management Committee. A fund management committee has been constituted to manage the RUDF funds. The committee evaluate the proposals technically, ascertain financial viability, social needs etc, received from ULBs for funding and sanction loans based on the assessment as above.

The committee will comprise the following:-

  1. Principal Secretary, LSG : Chairman
  2. Secretary, LSG
  3. Director Local Bodies
  4. Executive Director, RUIFDCO: Member Secretary
  5. Chief Executive Officer, RUIFDCO
  6. Chief Accounts Officer, DLB

The present status and progress of the Fund is as under:

(a) Receipt of funds

Fund of Rs. 25.00 Crore and Rs. 25.13 Crore were received from GoR and the ULBs respectively in March, 2010 against their contribution for F.Y. 2009-10. Rs. 50.00 Crore was received as contribution from GoR for financial year 2010-11. In the financial year 2011-12, Rs. 45.00 Crore have been received as contribution from GoR on 09.09.2011. In the current financial year i.e. 2012-13, Rs. 111.836 crore has been received as contribution from GoR. Amount of Rs. 16.24 Crore has been received as RUDF annual contribution from ULBs/UITs/DAs in the form of deduction by LSG Dept. in May, 2010 and November, 2010. Amount of Rs. 15.70 Crore has been received as RUDF annual contribution from ULBs/UITs/Das for F.Y. 11-12. Amount of Rs. 0.86 Crore has been received as RUDF annual contribution from ULBs/UITs/Das for F.Y. 12-13 and remaining amount are still awaited.


Loan agreement has been signed with HUDCO for funding infrastructure projects. State Guarantee has been received from GoR and sent to HUDCO. HUDCO has released 1st release of Rs. 25.00 Cr. HUDCO provided loan at an interest rate of 8.75% (Floating) which has now been increased to 11.75%.

National Housing Bank (NHB)

Loan agreement has been signed with NHB for a line of credit of Rs. 50.00 Crore for undertaking housing projects in Rajasthan under IHSDP & BSUP. State guarantee has been received from GoR and sent to NHB. Same has been withdrawn.

Accordingly, a total of Rs. 364.77 Crore has been received in RUDF upto 31.12.2012.

(b) Sanction vis-a-vis disbursement of loan.

Total amount of Rs. 342.08 Crore has been disbursed upto 31.12.2012 to the ULBs/UITs/Development Authorities, for fulfilling their immediate requirements as per the loan amount sanctioned in the meeting of FMC.