Municipal bond fund-raising trebles in 5 years; over Rs 6,000 cr mopped up

The surge comes also amid regulatory recognition of the need to encourage the use of an alternative source of finance for urban bodies

The total amount that municipal corporations have raised through the bond market has trebled since 2017. The latest regulatory filings of the Indore Municipal Corporation for another Rs 250 crore would mean that the total amount raised through this route will touch Rs 6,252 crore. This is 2.7x the cumulative amount of Rs 2,342 crore raised (as of 2017).

The Indian government provided financial incentives for municipal bond issuances as part of the Atal Mission for Rejuvenation and Urban Transformation (AMRUT, 2015) programme. It provides aid at the rate of Rs 13 crore for every Rs 100 crore of bonds