Pointing to the need of investment to bridge the infrastructure deficit in the country, Urban Development Minister Kamal Nath said his ministry was drawing a list of municipalities which could raise funds by issuing bonds in the capital market.
“Municipal bonds all over the world have a huge capital market but in India these have just not been used,” he said.
The minister stressed that apart from raising funds by issuing bonds, municipalities should also try to raise resources by leveraging assets like unused land. Nath said with the country urbanising rapidly, the infrastructure gap would widen if timely steps were not taken.
“In India there is a huge urban infrastructure deficit and our population has increased from 285 million in large urban areas in 2001 to 400 million in 2011. In the next 15 years it is likely to grow up to 600 million,” he said.
“For the first time the growth of the urban population is more than the rural growth. In the next decade there would be more than 70 cities with a population of million. This (infrastructure) deficit that we have, unless we act now, will only increase,” Nath said
The urban development minister said investment and capital expenditure in urban infrastructure need to be supported by urban governance reforms.
“How do we have the right governance in our large and small municipalities? This will be an important challenge which we are going to face,” he said.
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