Rs 5,000 Cr Urban Reform Initiative Aims To Boost Industrial Housing, MSME Growth & Worker Welfare

(MENAFN- KNN India) New Delhi, Jun 6 (KNN) The central government has unveiled a Rs 5,000 crore assistance scheme aimed at enhancing business environments in urban areas and advancing industrial worker welfare across states.

Under this initiative, states demonstrating proactive reform implementation, particularly in reducing bureaucratic obstacles, stand to receive up to Rs 700 crore in funding for designated priority sectors.

The central government's objective centers on stimulating economic growth and generating urban employment opportunities through strengthening existing MSME ecosystems while facilitating new industrial establishment.

The scheme identifies three primary focus areas: land, buildings, and construction, with particular emphasis on promoting affordable residential projects spanning less than 60 square meters.

These housing initiatives, designed to address accommodation challenges faced by industrial workers, must be integrated within industrial areas or parks as primary activities.

State governments will be required to facilitate such worker housing projects, with the stipulation that land use designations in declared industrial zones cannot be subsequently modified.

States have been allocated until December 15, 2026, to complete required reforms, after which the Ministry of Housing and Urban Affairs (MoHUA) will submit its assessment recommendations on December 20.

The Finance Ministry has established a three-tier categorisation system for states, with funding distribution aligned to this classification structure.

Implementation guidelines for the scheme will be issued by the MoHUA following this budgetary framework.

The initiative responds to previous setbacks experienced in Special Economic Zones (SEZ), where complex approval processes, restrictive building regulations, and rigid land usage requirements hindered development outcomes.

In the buildings and construction sector, states are being directed to rationalise setback regulations, which mandate specific empty spaces around structures.

The revised framework calls for differentiated setback requirements based on plot sizes, distinguishing between properties smaller and larger than 500 square meters.

Industry representatives have frequently cited these regulations as inefficient, resulting in valuable industrial land being rendered unusable solely for compliance purposes.

(KNN Bureau)

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