New Delhi, March 31 -- Smaller cities such as Nashik, Warangal and Bhubaneswar are likely to be among the early movers in accessing the Centre's Rs.4 lakh crore Urban Challenge Fund (UCF), which is set to roll out in April, HT has learnt. Announced by finance minister Nirmala Sitharaman in last year's Union Budget, the scheme will take off with the start of the new financial year, with states expected to receive the final guidelines in the first week of April, a Union ministry of housing and urban affairs (MoHUA) official said. The UCF is a centrally sponsored scheme to support projects under three verticals: developing cities as growth hubs; water and sanitation; and redevelopment of urban areas with ageing infrastructure. The Centre said the initiative will lead to a total investment of Rs.4 lakh crore in the urban sector over the next five years. Under the scheme, at least 50% of the project financing will come from market-based sources, while the Centre will cover 25% of the cost. The remainder will be shared by states, Union Territories (UTs), urban local bodies (ULBs) or other sources. The official cited above said cities of all sizes will be eligible for funding under the scheme and land value capture mechanisms can be leveraged to make projects financially viable. "The idea is not just to replace pipes or fix infrastructure, but to reimagine how these areas function," the official said, adding that projects may include redesigning public spaces....