Step forward for cities

Municipal bonds can help push local development

The decision to issue Rs 200 crore worth of bonds in the name of the Lucknow Municipal Corporation (LMC) is the right one, and will hopefully help kick-start attempts by multiple other urban local bodies in relatively under-developed states to find alternative ways of financing infrastructure by tapping the capital markets. The bonds, for which the coupon rate settled at 8.5 per cent, are being partly subsidised by the Union ministry of housing and urban affairs, to the tune of Rs 26 crore, which helped make their pricing more competitive. The issue is supposed to finance a series of infrastructure