Kochi corporation begins process to issue municipal bonds

Kochi: Cash-strapped Kochi corporation has begun steps to float municipal bonds to raise funds. Corporation authorities have started preliminary measures for issuing municipal bonds, and the process will be expedited after the model code of conduct as part of assembly elections is lifted.Corporation authorities plan to float municipal bonds and raise funds this year itself. A city corporation team led by mayor V K Minimol met officials with the Union ministry of housing and urban affairs last month. Ministry officials have promised full support for the issuance of municipal bonds, said city corporation sources. The ministry officials will provide training to the corporation officials in how to go about to float the bonds. "We need to raise funds for implementing various development projects and sustaining the already achieved targets. So, we are exploring the possibilities of issuing municipal bonds. We have included the proposal for issuing bonds in our budget for 2026-27," said Minimol.Deputy mayor Deepak Joy, corporation secretary P S Shibu and standing committee chairman Antony Painuthara also participated in the discussions with ministry officials.Corporation authorities have formed a monitoring committee and have assigned separate tasks to each official to ensure that the proposals announced in the budget are implemented in a time-bound manner. "Ensuring the development of a city like Kochi can't be done through tax revenue alone. That's why we decided to issue municipal bonds. We have received the nod from Securities and Exchange Board of India (Sebi) for issuing municipal bonds. Now, we have entrusted Centre for Heritage, Environment and Development (C-Hed) with identifying a bank with which we can associate for floating the bonds," said Joy. "Sebi has set certain guidelines for issuing municipal bonds. Kochi corporation officials have been asked to begin steps to float the bonds as per the guidelines," he added.As part of preliminary steps, corporation officials will go through the successful models of other local bodies across the country that have already issued municipal bonds. If needed, they will also communicate with these corporations. Municipal bonds help the local bodies raise funds for implementing development projects by accepting direct investments from the stock markets and the public, rather than relying solely on traditional govt grants and tax revenue. Now, the corporation will have to deploy a rating agency to assess the corporation's financial status. The funds will be raised by listing the municipal bonds on the stock exchanges in compliance with Sebi regulations.