Following the Indian government's announcement of incentives for municipal bonds in the budget, several municipal corporations are turning to the debt market for funding. The Bombay Municipal Corporation (BMC) and Ahmedabad Municipal Corporation (AMC) are in discussions to raise ₹1,000 crore in bond issuances. Smaller municipalities, including Patna, Aurangabad, Nagpur, and Bengaluru, are also seeking to raise ₹200 crore. Currently, the municipal bond market is valued at ₹4,340 crore, with the largest issuance recorded by Indore Municipal Corporation at ₹244 crore in early 2023. The government's new schemes provide incentives to encourage both smaller and larger municipalities to issue bonds, with smaller issuers receiving ₹13 crore for every ₹100 crore raised, capped at ₹26 crore. Larger municipalities, including Mumbai and Delhi, can receive ₹100 crore incentives for issuing ₹1,000 crore. This strategy aims to lower borrowing costs and enhance the appeal of market-based financing for urban infrastructure projects, promoting greater transparency and accountability in municipal financing.