The government is encouraging the urban local bodies (ULB) to raise funds by accessing the capital markets through issue of municipal bonds, Union Housing and Urban Affairs Minister Hardeep Singh Puri said today.
He was speaking on 'Urbanization in India: Trends, Challenges and Opportunities' at Vivekananda International Foundation here.
Puri said that the financing of the urban infrastructure is to be undertaken by the urban local bodies which apart from their own sources, are given funds by way of devolution by the states and also by way of grants from the Center as fixed by the Finance Commission.
"The total expenditure of the municipal sector accounts for about 0.6% of the national GDP in India, whereas it is substantially larger in comparable nations such as Poland (4.5%), Brazil (5%) and South Africa (6%)," he said.
Puri said that the government is encouraging the ULBs to raise finances by accessing the capital markets through issue of municipal bonds.
The minister said the aim of Atal Mission for Rejuvenation and Urban Transformation (AMRUT) is to provide basic civic amenities like water supply, sewerage, storm water drains, urban transport and parks to improve the quality of urban life.
The mission covers 500 cities having population of over one lakh, he said, adding that it also supports the states in taking up municipal reforms to improve financial health of the ULBs and deliver services to the citizen at the reduced cost
According to the ministry, the proposed investment under AMRUT is Rs 77,600 crore.
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