- VCF generates revenue from the increased value of private land/buildings.
- This revenue can be used to fund urban infrastructure projects.
- It helps overcome the challenge of limited revenues of cities and their limited capacity.
- It provides an additional funding source for Central/State Governments and ULBs.
- Examples of VCF tools: Premium on relaxation of rules/additional FAI, Land Pooling System, Transfer of Development Rights, Fees for changing land use.