New Delhi: Finance Minister Nirmala Sitharaman on Sunday proposed incentives of Rs 100 crore for single bond issuance by municipal corporations of more than Rs 1,000 crore.
She also announced the restructuring of REC Ltd (formerly Rural Electrification Corporation) and Power Finance Corporation (PFC) as part of the government’s public sector financial institution strengthening.
The minister proposed setting up a high-level committee on ‘Banking for Viksit Bharat’.
Such bonds can be used to raise money for creating infrastructure like roads, sewage, sanitation, airports, hospitals, school and water supply, among other things. Since these bonds are issued by government bodies, they are typically considered quite safe.
On January 29, the Economic Survey had said that Municipal green bonds have the potential to mobilise between $2.5-6.9 billion for local bodies driven climate action over the next 5-10 years, according to the Economic Survey tabled by Finance Minister Nirmala Sitharaman on January 29.
“Municipal green bonds can unlock $2.5–6.9 billion for local bodies driven climate action over the next 5–10 years,” the Economic Survey noted.
Economic Survey showed that Vadodara Municipal Corporation, Ahmedabad Municipal Corporation, Indore Municipal Corporation and Ghaziabad Municipal Corporation, have issued green bonds in India.
The cumulative amount raised by these corporations are Rs 694 crore, between February 2024 and May 2025.
