India may spend up to $900 billion on upgrading urban infrastructure by the 2031 fiscal year, according to the source, citing Bloomberg. The report says the country’s market regulator is also trying to deepen the municipal bond market.
The effort is being led by the Securities and Exchange Board of India, or SEBI. In May, the regulator released a consultation paper outlining measures aimed at helping smaller cities raise pooled financing and issue bonds to fund infrastructure projects. The goal is to reduce the shortfall in urban infrastructure funding.
Bloomberg notes that India is seeking to become a developed economy by 2047. As part of that push, the authorities want to expand the municipal bond market, which is still at an early stage of development.
Estimates show the country will need between 82 trillion rupees ($855 billion) and 86 trillion rupees ($900 billion) by fiscal 2031 to modernize urban infrastructure. Priority areas include essential services such as drinking water supply and sewerage systems.
India’s municipal bond market remains small for now. It accounts for less than 1% of total rupee-denominated bond issuance in the country. By comparison, Bloomberg says the segment makes up 7% of the entire bond market in the United States.
