BMC Plans Municipal Bonds To Fund Infrastructure As Liabilities Cross ₹2.13 Lakh Crore Despite ₹81,000 Crore FD Reserves

Mumbai: With liabilities crossing Rs. 2.13 lakh crore amid an aggressive infrastructure push, the Brihanmumbai Municipal Corporation (BMC) is now turning to the capital market for funds. The civic body has invited proposals to appoint a merchant banker for issuing municipal bonds, with the selected agency tasked with structuring the bonds, fixing interest rates and preparing the repayment schedule.

Only Rs 39,500 Crore Available for Mega Projects

India’s richest civic body, the BMC, holds Fixed Deposits (FD) worth around Rs. 81,000 crore, but nearly 51% of the reserves are locked into internal liabilities such as pensions, gratuity, provident fund contributions and refundable contractor deposits. This leaves around Rs. 39,500 crore available for infrastructure projects, even as the total cost of ongoing mega projects is estimated to be nearly four times higher, forcing the civic body to explore additional funding sources.

However, as the infrastructure costs continue to mount, the BMC is preparing to tap the capital market through municipal bonds — debt instruments used by civic bodies to fund public projects. The civic body had also recently invited a tender to appoint a SEBI-registered agency to assess its creditworthiness ahead of future market borrowings.

MLA Rais Shaikh Opposes Move, Says Interest Burden on Citizens

Meanwhile, Samajwadi Party MLA Rais Shaikh opposed the move, saying the interest burden of municipal bonds would ultimately fall on Mumbai’s citizens. Questioning the appointment of consultants despite the state’s austerity push, he argued that civic officials themselves could handle the bond process. Shaikh also questioned the need for market borrowing when the civic body had claimed future projects would proceed only after feasibility assessments.

The BMC’s planned entry into green bonds to fund projects under Mumbai’s Climate Action Plan comes amid the Centre’s push for municipal market borrowings. In the Union Budget 2026, Finance Minister Nirmala Sitharaman announced a Rs. 100-crore incentive for a Rs. 1,000-crore municipal bond issuance under the AMRUT 2.0 framework. Civic officials said the BMC aims to raise between Rs. 5,000 crore and Rs. 10,000 crore through green bonds to finance major infrastructure projects, including wastewater treatment plants at Dharavi, Versova, Bhandup, Ghatkopar, Bandra and Malad, proposed desalination plants, two water tunnel projects and the Gargai dam project.

To get details on exclusive and budget-friendly property deals in Mumbai & surrounding regions, do visit: https://budgetproperties.in/