Pune Municipal Corporation’s Bond Issue Listed 

Pune Municipal Corporation successfully listed the country's first municipal bond on the Bombay Stock Exchange.

The first tranche of the Rs 2,300-crore issue received an overwhelming response from investors and was subscribed six times. The proceeds from the 10-year bond that carries a coupon rate of 7.59 percent will be used to develop a round-the-clock water project by laying underground water pipes. This will also be an opportunity to lay high-speed optic fibre cables to make the city digitally powered, said Kunal Kumar, commissioner of the municipal corporation.

Union urban development minister M Venkaiah Naidu said at the listing that the new approach will empower city governments and enhance their cash flows and municipal bonds will become an important tool for urban transformation. It adds to the government's infrastructure push, he said.

The Centre has approved Rs 4.13 lakh crore for improving basic urban infrastructure, Naidu said. A total of 500 cities with population above 1 lakh were mandated to get credit ratings, and 408 have already initiated the process. Out of the municipal corporations that have already received their ratings, 29 were graded ‘A' and above. For better performing local bodies, he said, a 20 percent additional incentive will be granted by the government.

On farm loan waivers, Naidu said such a measure should only be used in “extreme situations”. “A loan waiver is not the final solution,” he said, adding that states should focus on strengthening the system, development of rural infrastructure and providing affordable credit to farmers, instead of doling out freebies.