Additional Municipal Commissioner Santosh Kumar said, “We will have to make by-laws specifying interest rates, time duration and other details about the bonds. We are yet to chalk out a plan. LMC’s credit rating has already been conducted and the outcome is not bad.” The credit rating shows the financial condition of an organisation, evaluating its assets, revenues and deficit.

“People like to invest in a profit-making organisation. So, they have to be taken into confidence. LMC will create a strategy to ensure returns on money invested,” he added. Kumar further said the process may take a few years to be established perfectly. Talking to The Indian Express, U B Singh, Joint Director of Regional Centre of Urban and Environment Studies, said municipal bonds can be a promising alternative for financing urban infrastructure. “In the wake of implementation of JNNURM projects, its importance has increased even further as LMC has to contribute 30 per cent of the projects,” he said.

Director, Local Bodies (UP), Rekha Gupta, said: “We have invited firms to give a concept on how local bodies can generate funds for infrastructure development.”

The Credit Analysis and Research Ltd, New Delhi has given “BB Is” rating to LMC, i.e., it offers adequate safety for timely servicing of debt obligations. However, the agency has praised LMC for its consistency in generating revenue surplus. During the financial year 2007, the revenue surplus was Rs 14.6 crore, an increase of over 30 per cent compared to the previous year.