You are here: Home » Opinion » Letters
Business Standard

Letter to BS: Bonds issued by civic institutions carry onus of public trust

Bonds are subject to investment ratings by independent agencies; the coupon rates go up as ratings dip to raise the debt burden that makes its servicing tough

Business Standard 

green bonds, investment, mutual funds, growth, money, dividends

This refers to “Munis: Smart for smart cities” (December 5). issued by civic institutions carry the onus of public trust. In mid-2017, the Pune Municipal Corporation (PMC) raised Rs 2 billion via a bond issue. Many saw this as a test case for the revival of municipal in India. In July 2018, Indore followed suit. Bonds are subject to investment ratings by independent agencies; the coupon rates go up as ratings dip to raise the debt burden that makes its servicing tough. Most cities consume more than half of the revenue in salaries. With a pension scheme, the liabilities are open ended.

With smart cities in the offing, a bulk of their financing could well be through municipal bonds. To be fruitful and viable, administrative mechanisms need to be in place that transcend political interests to be able to raise large finances, and also deliver and sustain results. Bonds do bring in a civic accountability and professionalism that budget support are hardly equipped with.

R Narayanan Navi Mumbai


can be mailed, faxed or e-mailed to:

The Editor, Business Standard

Nehru House, 4 Bahadur Shah Zafar Marg

New Delhi 110 002

Fax: (011) 23720201 · E-mail: letters@bsmail.in

All must have a postal address and telephone number

First Published: Thu, December 06 2018. 21:32 IST
RECOMMENDED FOR YOU