Municipal Bonds Can Help Cash-Starved Urban Local Bodies To Raise Funds For Improving Their Service Quality


Municipal Bonds Can Help Cash-Starved Urban Local Bodies To Raise Funds For Improving Their Service Quality

Even as urban India has burst its carrying capacity, hundreds of municipal bodies remain cash strapped and helpless to revamp the crumbling infrastructure of their corporations— leave alone invest in capacity addition. Critical functions such as providing water and sewage treatment have been neglected for decades causing serious health hazards. Beset with corruption and empty coffers most urban local bodies (ULBs) have evinced no interest in overhauling anything. Which is why the Centre’s plans to provide an ecosystem to help them raise funds through municipal bonds has generated much hope.

Global examples show that municipal bonds are widely considered safe investments. India has a good track record of issuing bonds through its highly performing central corporations, mostly in the energy, railways and highway sectors. Sadly this does not extend to the urban development sector whose track record of inefficiency belies trust in the ULBs’ capabilities. Read More…

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