Lucknow/Prayagraj: In a significant step towards strengthening urban infrastructure financing, the Uttar Pradesh cabinet on Wednesday approved the issuance of municipal bonds worth Rs 150 crore for three major cities. Municipal corporations in Agra, Prayagraj, and Varanasi have been given a go-ahead to raise Rs 50 crore each through these bonds.
The approval marks a milestone in the state’s journey toward innovative urban financing and robust fiscal governance, officials said. Municipal bonds will serve as a source of funding for revenue-generating projects. Notably, only Ghaziabad and Lucknow municipal corporations, out of 17 in the state, have previously issued such bonds.
“The approval demonstrates our commitment to exploring alternative sources of project finance while maintaining strong fiscal discipline. It also enables urban local bodies in Uttar Pradesh to access stock markets and other innovative financial platforms,” said Amrit Abhijat, principal secretary of the urban development department. “While there is no scarcity of funds under Chief Minister Yogi Adityanath’s tenure, we are proactively adopting innovative financing mechanisms to accelerate urban development and ensure transparency and accountability at all levels,” he added.
In Prayagraj, the Rs 50 crore raised through bonds will be used to fund healthcare facilities, potentially creating employment opportunities for 600 to 700 families. In Agra, the civic body plans to set up a solar power plant, which is expected to save Rs 4 crore annually while also upgrading tourist facilities and establishing co-working spaces.
In Varanasi, the funds will be directed toward constructing a hotel complex with underground parking near Sigra Stadium and a market complex with basement parking at Lahurabir Road to alleviate traffic congestion. These initiatives are projected to save Rs 8 crore to Rs 10 crore annually.
Officials said that the upcoming projects, funded through this alternative mechanism, will be revenue-generating and self-sustainable. A framework aligned with guidelines from the Reserve Bank of India and the union finance ministry has been developed to ensure effective implementation.
The approval marks a milestone in the state’s journey toward innovative urban financing and robust fiscal governance, officials said. Municipal bonds will serve as a source of funding for revenue-generating projects. Notably, only Ghaziabad and Lucknow municipal corporations, out of 17 in the state, have previously issued such bonds.
“The approval demonstrates our commitment to exploring alternative sources of project finance while maintaining strong fiscal discipline. It also enables urban local bodies in Uttar Pradesh to access stock markets and other innovative financial platforms,” said Amrit Abhijat, principal secretary of the urban development department. “While there is no scarcity of funds under Chief Minister Yogi Adityanath’s tenure, we are proactively adopting innovative financing mechanisms to accelerate urban development and ensure transparency and accountability at all levels,” he added.
In Prayagraj, the Rs 50 crore raised through bonds will be used to fund healthcare facilities, potentially creating employment opportunities for 600 to 700 families. In Agra, the civic body plans to set up a solar power plant, which is expected to save Rs 4 crore annually while also upgrading tourist facilities and establishing co-working spaces.
In Varanasi, the funds will be directed toward constructing a hotel complex with underground parking near Sigra Stadium and a market complex with basement parking at Lahurabir Road to alleviate traffic congestion. These initiatives are projected to save Rs 8 crore to Rs 10 crore annually.
Officials said that the upcoming projects, funded through this alternative mechanism, will be revenue-generating and self-sustainable. A framework aligned with guidelines from the Reserve Bank of India and the union finance ministry has been developed to ensure effective implementation.