India, Feb. 1 -- The Union government has announced an incentive of Rs 100 crore for a single-bond-issuance of more than Rs 1,000 crore by a municipal corporation.

"To encourage the issuance of high-value municipal bonds by big cities, I propose an incentive of Rs 100 crore on a single bond issue of more than Rs 1,000 crore. Also, the scheme to encourage bond issuance of up to Rs 200 crore under Amrit for small and medium cities will continue," said Union finance minister Nirmala Sitharaman in her Union Budget 2026-27 speech on February 1.

Experts say the increased incentives will encourage local bodies to raise money directly from the market instead of relying on the government. This will enhance discipline, performance and transparenc...