Lucknow, July 06: In the Cabinet meeting chaired by Chief Minister Yogi Adityanath, approval was granted to the proposal for the issuance of Municipal Bonds by Gorakhpur Municipal Corporation and Moradabad Municipal Corporation and for providing funds from the Infrastructure Development Fund to enhance their credit ratings. This decision will help both Municipal Corporations mobilise resources from the market for urban infrastructure development.
Finance Minister Suresh Kumar Khanna stated, "The objective of the state government is to make urban local bodies financially more capable and self-reliant. Keeping in view the need to mobilise funds from various financial sources for the development of urban infrastructure and civic amenities, this important decision has been taken to strengthen financial management, promote market orientation, and enhance the creditworthiness of urban local bodies. The Government of India is also providing incentives under its incentive scheme to urban local bodies that issue Municipal Bonds."
Government incentives for bonds
The Finance Minister noted, "The Government of India will provide incentive assistance for raising funds through Municipal Bonds. Under this, there is a provision for a grant of Rs 13 crore for bond issuances of up to Rs 100 crore and a maximum grant of Rs 26 crore for bond issuances of up to Rs 200 crore. All Municipal Corporations issuing Municipal Bonds will comply with the provisions prescribed by the Securities and Exchange Board of India (SEBI)."
AMRUT 2.0 reforms and projects
He further stated, "Under the guidelines of AMRUT 2.0, urban local bodies have been encouraged to issue Municipal Bonds, and this has also been included among the state-level reforms. Accordingly, proposals have been made for Gorakhpur Municipal Corporation to issue Municipal Bonds worth up to Rs 80 crore and Moradabad Municipal Corporation to issue Municipal Bonds worth up to Rs 50 crore.”
He added, “Both Municipal Corporations have obtained approval from their respective Municipal Corporation Houses and have also selected the relevant projects. This will give fresh momentum to infrastructure development in both cities and further strengthen the financial capacity of the urban local bodies."
