An autonomous research institute under the Ministry of Finance


Financing Municipal Services: Reaching Out To Capital Markets

Publication date

Dec, 2003


Report submitted to the UNDP


Om Prakash Mathur, Sanjukta Ray


Accelerating the flow of investible resources into urban infrastructure and services, viz., water supply, sewerage and wastewater disposal systems, solid waste collection, treatment and management, citywide roads, and street lighting is central to India’s economic growth and poverty reduction agenda. Current investment levels in urban infrastructural services, estimated at about 2.25 to 2.50 per cent of the total development budget, are far too low in relation to the requirements, with no signals that these levels will be stepped up in the short run. Indeed, fiscal adjustment aimed at reducing budget deficit may force a cutback in public investments in infrastructural facilities. What alternatives exist for spurring investment into urban infrastracture services? Taking note of the emergence of a capital (debt) market in the country and its sensitivity to meeting the infrastructural needs of municipalities as is demonstrated by the examples of Ahmedabad, Bangalore, Hyderabad, Indore, Ludhiana, Madurai, Nagpur, Nashik, and more recently, Thane, and simultaneously examining as to what makes some municipalities to gain access to the capital market and other municipalities to continue to rely on state government grants and loans, this study entitled Financing Municipal Services: Reaching Out to Capital Markets provides a framework for municipalities to assess their creditworthiness for tapping the nascent but expanding capital market for financing urban infrastructural services.:

  • Download
  • blog comments powered by Disqus