UP clears municipal bonds for 3 citiesVaranasi's Kashi Vishwanath temple

Virendra Singh Rawat

The Uttar Pradesh government has cleared the municipal bonds proposal for three cities including Varanasi, Prayagraj and Agra.

The three municipal corporations would join the league of Lucknow and Ghaziabad, which earlier successfully floated their muni bonds.

The UP cabinet meeting yesterday at Prayagraj, where Maha Kumbh 2025 is underway, chaired by chief minister Yogi Adityanath cleared several proposals including the proposed muni bonds issue.

Later talking to the media, Yogi said Varanasi is leaving a global imprint under the leadership of Prime Minister Narendra Modi, and as such municipal bonds will be issued.

Modi is the Lok Sabha representative of the Varanasi parliamentary constituency.

In the first phase, municipal bonds worth Rs 50 crore each will be floated for the three cities viz. Varanasi, Prayagraj and Agra, thus totalling Rs 150 crore.

In November 2020, bonds worth Rs 200 crore of the Lucknow Municipal Corporation (LMC) were oversubscribed by 250 percent on debut at the BSE. The municipal bonds floated by the LMC with 10 year tenure offered 8.5 percent interest.

In March 2021, Ghaziabad Municipal Corporation (GBC) became India’s first municipality to issue green municipal bonds worth Rs 150 crore. GMC mopped up Rs 100 crore and Rs 50 crore in base issue and green shoe option respectively, totalling Rs 150 crore in proceeds.

Bond is a debt security issued by a government agency or municipality to finance capital expenditure; while the investors get payments or returns on predetermined rate of interest over a stipulated time period.

Meanwhile, the cabinet also approved the bid document for the procurement of 2.5 million smartphones for free distribution to higher education students under the Swami Vevakananda Yuva Shashaktikaran Yojana.

The scheme is effective for five years, while an allocation of Rs 4,000 crore has been made in the UP Budget 2024-25.

The cabinet also cleared the new policy for the aerospace and defence sector by providing more incentives and sops for private investment.

The state is promoting its UP Defence Industrial Corridor (UPDIC), which spans 6 nodes viz. Lucknow, Kanpur, Agra, Chitrakoot, Jhansi and Aligarh.

The new FDI policy was also approved to woo Fortune 500 and global blue chip companies in a host of sectors.

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