MoHUA Consults Market Experts to Deepen India’s Municipal Bond Ecosystem

The Ministry of Housing and Urban Affairs (MoHUA) on Tuesday convened a high-level consultation titled "Municipal Bonds Unpacked – A Dialogue with the Intermediaries", aimed at strengthening the municipal bond market and expanding alternative financing avenues for Urban Local Bodies (ULBs).

The consultation brought together senior Government of India officials, market regulators, credit rating agencies, transaction advisers and domain experts to deliberate on how Indian cities can access capital markets in a sustainable, structured and scalable manner.

Municipal Bonds Key to Urban Infrastructure Financing

Secretary, MoHUA, Shri Srinivas Katikithala, outlined the Government's vision of empowering cities through innovative financing mechanisms, emphasising municipal bonds as a critical tool for funding urban infrastructure and improving service delivery.

He noted that as India's urbanisation accelerates, cities require stronger financial autonomy and diversified funding sources beyond traditional grants and budgetary allocations.

Strengthening Capacity and Financial Management

Additional Secretary, MoHUA, Ms. D. Thara, presented India's experience with municipal bond issuances so far, highlighting the need for continued reforms to enable more cities to participate.

She stressed the importance of:

• Capacity building within ULBs

• Improved financial management practices

• Stronger institutional frameworks

• Enhanced transparency and reporting systems

These measures, she said, are essential for scaling up municipal bond issuances across the country.

Regulatory and Market Perspectives Shared

The consultation featured key insights from regulatory and market intermediaries:

Shri Pramod Rao, Former Executive Director, SEBI, shared the regulatory viewpoint on creating a conducive environment for municipal bond issuances and improving investor participation.

Shri Suprio Banerjee, Vice President & Co-Group Head, ICRA, spoke on the importance of credit ratings for ULBs, emphasising that fiscal discipline, robust revenue streams, transparency and timely financial reporting are central to strengthening creditworthiness.

Shri Umesh Khandelwal, Chief Business Officer, TIPSON Group, provided transaction advisory insights, focusing on the role of intermediaries such as merchant bankers and transaction advisers in structuring successful bond issuances.

Shri Sashi Krishnan, Director, NISM, placed the discussion in the broader context of developing a vibrant municipal debt market in India.

The programme was moderated by Dr. Dhiraj Jain, Professor at NISM.

Building Investor Confidence and Standardising Processes

Deliberations underscored the growing importance of municipal bonds in mobilising resources for urban development, improving financial autonomy of cities and supporting the Government's vision of sustainable and resilient urbanisation.

Stakeholders discussed key priorities to strengthen the ecosystem, including:

• Expanding investor confidence

• Standardising issuance processes

• Enhancing creditworthiness of ULBs

• Scaling up bond issuances across more cities

MoHUA Reaffirms Commitment to Robust Municipal Finance

MoHUA reiterated its commitment to working closely with regulators, intermediaries and city governments to create a strong municipal finance ecosystem and encourage greater participation of cities in capital markets.

The consultation forms part of the Ministry's continuous efforts to explore innovative financing mechanisms and build ULB capabilities to meet the growing infrastructure needs of India's rapidly urbanising landscape.