CONTENTS 1 Introduction . 1 1.1 Brief Background . 1 1.2 Urban AgendA 2 1.3 Investment for urban infrastructure 2 1.4 74th Constitutional Ammendment 4 1.5 Importance of urban Financing 4 1.6 Revenue base of ULB’s in India 6 1.7 Research Question? 7 1.8 Aim 7 1.9 Objectives 7 1.10 Data Sources 7 1.11 Scope 8 1.12 Limitations 8 2 Literature Review 9 2.1 Revenue Base of ULB’s in India 9 2.2 74th Constitutional Amendment Act 9 2.3 FIRE-D, 1994 (Indo USAID FINANCIAL institution Expansion & Reforms) 9 2.4 Rakesh Mohan Committee, 1996 10 2.5 Grants . 10 2.5.1 City Challenge Fund, 2002 . 11 2.5.2 Urban Infrastructure Reform Incentive Fund 11 2.5.3 Jawaharlal Nehru National Urban Renewal Mission (JnNURM) . 12 2.5.4 Smart Cities 14 2.6 Municipal Borrowings 14 2.6.1 Status of Municipal Finance in India . 15 2.6.2 Municipal Bonds 15 2.6.3 Term loans from commercial banks 17 2.6.4 Term Loans from HUDCO 17 2.6.5 Internal Borrowings 17 2.6.6 Public Private Partnership . 17 2.6.7 Unbundling of services 18 2.6.8 Pooled Finance Structures 18 2.6.9 Pooled Finance Scheme by Ministry of Urban Poverty Alleviation and Employment, GoI 19 2.6.10 User Charges 19 2.6.11 Property Tax 19 2.7 Urban Development Institutions 19 2.7.1 Urban Development and Urban Housing Department 20 2.7.2 Gujarat Municipal Finance Board (GMFB) 20 2.7.3 Gujarat Housing Board 20 2.7.4 Gujarat urban development company (GUDC) 21 2.7.5 Gujarat urban development mission (GUDM) 21 3 Local Borrowings and Municipal Bonds 22 3.1 Decentralization in Public Finance 22 3.2 Local Borrowings 22 3.3 Factors affecting Local borrowings 24 3.4 Types of municipal borrowings . 25 3.5 Municipal Bonds: As an instrument of Borrowing from Market 25 3.5.1 Types of Municipal Bonds . 25 3.5.2 Process of issuance of Municipal Bonds 26 3.5.3 Advantages of Municipal Bond 26 3.5.4 Disadvantages of Municipal Bonds 27 4 Municipal Bonds in India 29 4.1 Evolution of Municipal Bonds in India 29 4.2 Accounting reforms in India 29 4.3 Trends of issuance of Municipal bonds in India 30 4.4 Pooled Finance Schemes (TNUDF Model) 32 4.5 Challenges for municipal Bond market in India 33 4.6 Current developments to facilitate municipal bond market 35 5 Municipal BOND: - Case of Ahmedabad Municipal Corporation . 37 5.1 Introduction 37 5.2 Profile of Ahmedabad Municipal Corporation 37 5.3 Fiscal health of Ahmedabad Municipal corporation 38 5.4 Urban infrastructure in Ahmedabad Municipal Corporation 38 5.5 Municipal Bonds by AMC 40 5.6 Data Analysis 41 5.6.1 Quantitative Data Analysis 41 5.7 Qualitative Data Analysis 51 5.7.1 Tools Used for Data Collection . 52 5.7.2 Analysis of the Interview 52 5.7.3 Summary of Interview analysis 53 5.8 Summary of Quantitative and Qualitative data analysis 53 5.9 Conclusion 54 6 Municipal Bond as an Instrument of Borrowing: Issues and Way Forward 55 6.1 Introduction 55 6.2 Municipal Bond in India 55 6.3 Municipal Bond: Case of Ahmedabad Municipal Corporation 56 6.4 Issues 56 6.5 Way Ahead 57 6.6 Conclusion 60 7 References . 61