Municipal corporations should increasingly raise funds from capital markets through municipal bonds to finance urban infrastructure projects, Chief Minister Devendra Fadnavis said, noting that such instruments can provide cities with a sustainable source of development funding.
Speaking at the National Stock Exchange (NSE) in Bandra-Kurla Complex during the listing of the Nashik Municipal Corporation’s green bond on Monday, Fadnavis said urban local bodies should explore capital markets to mobilise resources for public infrastructure rather than relying solely on traditional government funding.
He said the Nashik civic body has set an example by entering the capital market through municipal bond issuances and demonstrating how cities can tap investors to finance public infrastructure projects.
Central Government push
The Chief Minister noted that the Central government has introduced schemes to encourage municipal bond issuances. Initially, approval was given for municipal bodies to raise up to ₹200 crore through such bonds.
Following the success of the initiative, the Union Budget increased the limit to ₹1,000 crore, while incentive support under the scheme has also been raised to ₹200 crore.
According to Fadnavis, funds mobilised through municipal bonds can support critical civic infrastructure such as water supply networks and urban development projects. He said the money raised through the Nashik bond issue will be used for water supply projects aimed at reducing leakage in the city’s distribution network.
Small civic bodies
He also suggested that smaller municipal corporations could collectively issue bonds worth about ₹1,000 crore in the capital market so that they too can benefit from the Centre’s incentives and strengthen funding for urban infrastructure.
Fadnavis also called for the creation of innovative funding mechanisms by municipal bodies, saying such initiatives can improve the financial capacity of cities and accelerate urban development.
Published on March 9, 2026
