The weak balance sheets of the municipal bodies are a challenge in the event of municipal bond market in India, stated Securities and Exchange Board of India (SEBI) Chairperson Tuhin Kanta Pandey at an occasion in Mumbai on September 18, 2025.
“Municipal bonds have been a cornerstone of city-level development, enabling urban local bodies to raise long-term funds for essential projects such as water supply, sanitation, transport, and waste management… challenge lies in project readiness and credibility. Many municipal bodies struggle with weak balance sheets or delayed clearances,” stated Mr. Pandey talking on the Annual Infrastrucutre Conclave of National Bank for Financing Infrastructure and Development (NaBFID).
“While the municipal bond market in India is still at a nascent stage, its potential is immense,” he added.
He referred to as for measures to develop the capital market and make it enticing for institutional and retail buyers to take a position in municipal and inexperienced bonds.
Speaking on the conclave, he additionally emphasised the necessity to develop the asset monetisation plan. “There is a need to accelerate asset monetisation in various sectors such as roads, railways, ports, airports, energy, petroleum & gas and logistics. State Governments, barring a few, are yet to crystalise asset monetisation plans to provide further boost to infrastructure creation,” Mr. Pandey stated.
He additional highlighted the event of the Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) as a new asset class. It is the “most promising avenues for channelising long term capital into infrastructure and real estate”, he stated.
SEBI had lately introduced that ReITs are actually categorised as equities, which might make them eligible to be listed on indices and guarantee larger participation.
