Patna set to launch Bihar's first ₹200 crore municipal bond

Patna Municipal Corporation will issue municipal bonds worth ₹200 crore, with bids opening on October 30, marking the first bond issuance by any body in Bihar. The move aims to raise funds for urban projects and follows a government push to expand city financing. Kanpur Nagar Nigam plans a similar issue of ₹125 crore, scheduled for a later date. Investors such as HUDCO and the National Bank for Financing Infrastructure and Development (NaBFID) have already shown interest, signalling growing appetite for municipal debt. The 10‑year government bond yield rose to 7.44% on Wednesday, up from 6.90% a month earlier, providing a reference point for pricing the new issues. The state finance department has rolled out incentives and streamlined approvals to attract private capital into municipal projects. Analysts expect the raised capital to close financing gaps for infrastructure schemes slated for 2025. Recent months have seen a rise in municipal bond issuances across other Indian states, reflecting broader market confidence. Higher yields make municipal bonds relatively attractive compared to bank loans. ## Context Municipal bonds let city bodies borrow directly from investors to fund water, roads and other civic work, reducing reliance on state loans. Bihar’s first issue signals that local governments are now seen as credible borrowers, a trend encouraged by central‑government policies to boost urban infrastructure financing.