Yogi government eyes Rs 350 crore civic bonds for an infrastructure push

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Published: July 16, 2019 1:07:16 PM

The funds would be used for improving drinking water supply and sewerage system in Lucknow and tertiary treatment of sewage water for industrial usage in Ghaziabad.

Lucknow, Ghaziabad, Uttar Pradesh,  municipal bond, Ghaziabad Municipal Corporation, BSE, NSE, Bombay Stock Exchange, National Stock Exchange, The decision to float the bonds was taken at a state cabinet meeting chaired by chief minister Yogi Adityanath.

In a bid to generate funds for infrastructure projects of Lucknow and Ghaziabad civic bodies, the Uttar Pradesh government on Monday gave its nod to float municipal bonds worth Rs 350 crore. Through the bonds, the government aims to raise Rs 200 crore for Lucknow Municipal Corporation and Rs 150 crore for Ghaziabad Municipal Corporation. The bonds are likely to be floated within a month.

The funds would be used for improving drinking water supply and sewerage system in Lucknow and tertiary treatment of sewage water for industrial usage in Ghaziabad.

The decision to float the bonds was taken at a state cabinet meeting chaired by chief minister Yogi Adityanath. Urban development principal secretary Manoj Kumar Singh said that it is for the first time that municipal bonds are being floated in UP. He said the bonds would be floated for 10 years with annual returns of 8½-9%. The funds would be invested in projects with potential to generate enough returns for repayment to investors. The bonds would be listed either on Bombay Stock Exchange (BSE) or National Stock Exchange (NSE).

“For every Rs 100 crore raised via such bonds, the Centre provides a subsidy of Rs 13 crore, which in turn would give urban local bodies the flexibility to meet their repayment commitments,” Singh noted.

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