Uttar Pradesh Approves New City Projects With Rs 1,832 Crore Seed Capital Under CM’s Urban Expansion Scheme

Uttar Pradesh has approved a major funding push for the development of new urban centres, sanctioning Rs 1,832.51 crore as seed capital for projects in Rampur, Ayodhya, Lucknow and the Baghpat-Baraut Khekra Development Authority, according to a state government press release.

The financial backing comes under the Chief Minister’s Urban Extension/New City Promotion Scheme, with the first instalment of Rs 970 crore to be released shortly.

For the 2025–26 financial year, the state government has earmarked Rs 3,000 crore for the scheme, which is aimed at ensuring systematic expansion and modernisation of cities while improving housing access for the growing urban population.

The Urban Extension scheme was formalised through a government order on 6 April 2023, setting guidelines for the comprehensive development of emerging cities.

It allows the state to contribute up to 50 per cent of land acquisition costs as seed capital, with repayment scheduled over a maximum of 20 years.

The release stated that the initiative is designed not only to create well-planned, liveable cities but also to balance rapid urbanisation with infrastructure demands.

By funding strategic land acquisition and development, the government hopes to prevent unregulated sprawl and provide structured housing facilities.

The Cabinet has further authorised the Chief Minister to make amendments or modifications to project plans if required, ensuring flexibility in execution.

With Ayodhya and Lucknow already at the heart of the state’s development narrative, the inclusion of Rampur and Baghpat-Baraut Khekra signals a wider push to spread growth beyond traditional centres.

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