BENGALURU: With credit rating documentation completed, five city corporations under GBA are preparing major projects to be undertaken using municipal bonds. The five corporations are expected to get their credit ratings before the end of this month, post which they need to announce the project and generate the required funds by issuing municipal bonds.
To incentivise municipalities and develop urban areas, Finance Minister Nirmala Sitharaman had announced in the Union Budget that an incentive of Rs 100 crore would be provided for a single bond issue of more than Rs 1,000 crore.
Even Chief Minister Siddaramaiah, while presenting the budget, asked the five corporations to mobilise resources for development works by issuing ‘Municipal Bonds’ based on their balance sheets. Each of the five corporations, in their maiden budgets in March, announced plans to issue municipal bonds worth Rs 200 crore.
“Earlier, we had BBMP, which was dissolved to form Greater Bengaluru Authority with five new city corporations. To issue municipal bonds, each corporation must have a credit rating, which, in simple terms, is an assessment of the borrower’s creditworthiness. We have completed documentation work for the same,” said GBA Special Commissioner (Finance) Harish Kumar.