Daily Current Affairs – 2020Topic: For Prelims and Mains
Vadodara Municipal Corporation(VMC) is expected to launch municipal bonds and will become the third Urban Local Body(ULB) in Gujarat to use municipal bonds to raise money.
Municipal Bonds is a kind of debt instrument where investors offer loans to local governments.
Purpose: They are issued by civic bodies for specific projects and usually have a 10-year tenure. The ULB pays the annual interest on the bonds to the investor at the decided rate.
Difference: The difference between a bank loan and a municipal bond is that any institution can secure a bond only if it has favourable credit ratings.
Benefits: The bond helps raise funds from the stock market. The bond also increases the number of investors available to the civic body, as compared to a loan from a single bank.
It was launched in 2015 by the Ministry of Housing and Urban Affairs.
It aims to ensure universal coverage of drinking water supply and substantial improvement in coverage and treatment capacities of sewerage and septage along with storm water drainage, non-motorized urban transport and green spaces & parks.
It aims at to reducing logistics cost for export-import and domestic trade with infrastructure investment.
Development of Coastal Economic Zones (CEZ) under Sagarmala would become a microcosm of the blue economy, wherein industries and townships that depend on the sea will contribute to global trade.