Need to give thrust to municipal bonds, says experts

Mumbai, Jun 29 (PTI) There is a need to give a push to
the Municipal Bonds in the country as state governments are
struggling hard to raise money to fund infrastructure projects
at the local level.
"The municipal bonds' market in the country remains
minuscule despite being around for nearly 11 years," rating
agency, CRISIL's Corporate and Infrastructure (Rating) Head,
Akash Deep Jyoti told PTI here.
Since 2001, 13 municpal bonds have been issued to the
tune of Rs 733 crore, which constitutes only 0.2 per cent of
the total bond market, he said.
"We need to enhance this market, which has the potential
to grow to the tune of an additional Rs 2,000-4,000 crore in
the next five years," Jyoti said.
This is, however, under the condition that municipal
corporations take up the infrastructure projects in a
time-bound manner under the Jawaharlal Nehru Renewable Urban
Mission (JNRUM), he said.
The government has rated 63 municipal corporations
pan-India to enable them to raise funds for JNRUM projects.
Concerted and concrete efforts are required not only
by the government and regulators, but also by issuers and
investors to utilise the optimum potential of these bonds,
Jyoti said.
In the US, the MBs market is huge and constitutes as
much as 15 per cent of the total bonds market as it is looked
upon as a sound asset class, he said.