Patna: The urban development and housing department (UDHD) has approved a proposal allowing Patna Municipal Corporation (PMC) to issue municipal bonds worth up to Rs 200 crore. The move will enable the civic body to raise funds for major urban development projects in the state capital.Deputy chief minister and UDHD minister Vijay Kumar Sinha said the proposal has been sent to the finance department for concurrence. “Once the department grants its approval, the matter will be placed before the state cabinet for final sanction. After receiving Cabinet approval, the PMC will proceed with the bond issuance process according to the prescribed departmental guidelines,” he said.With this, Patna will become one of the few municipal bodies in the country to issue municipal bonds. The proposal was earlier approved by PMC’s empowered standing committee at its meeting on Jan 12, 2026, before being sent to the state govt.“The funds raised through these bonds will be used for important urban redevelopment works in Patna. Notably, the money, along with central govt incentives, will support the redevelopment of the New Market area near Patna Railway Station and other commercial zones. These projects are intended to be submitted to the Govt of India under the Urban Challenge Fund announced in the Union Budget 2026-27,” Sinha said.PMC has invited tenders to select a credit rating agency. Officials expect the bonds to receive a rating of up to AA, which could attract strong institutional investment.Highlighting the benefits, Sinha said for every Rs 100 crore raised, the central govt provides an incentive of up to Rs 13 crore. “This significantly reduces project costs, potentially reducing the net effective cost by approximately 2%, making it a more cost-effective option compared with bank loans,” he said.He added the bonds offer flexibility in repayment. “It is also possible to set a moratorium period according to the cash flow needs of the projects. This initiative is expected to promote financial discipline among municipal bodies and bring about a significant improvement in the quality and efficiency of civic services in Patna,” Sinha said.
