Need to give thrust to municipal bonds, says expert
The municipal bonds' market in the country remains minuscule despite being around for nearly 11 years.
By PTI |
MUMBAI: There is a need to give a push to Municipal Bonds (MBs) in the country, especially as State Governments are struggling hard to raise money to fund several key 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 pc of the total Indian 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 pc of the total bonds market as it is looked upon as a sound asset class, he said.
"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 pc of the total Indian 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.
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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 pc of the total bonds market as it is looked upon as a sound asset class, he said.
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