There is a dire need to plan for and substantially invest in the infrastructure of Indian cities to meet the aspirations of nearly half a billion people.  Market-based mechanisms, including municipal bonds, could finance infrastructure and help improve the quality of living in those cities.

To accomplish this, stakeholders across the urban development sector must galvanize on two parallel reform tracks:

• First, a set of fundamental financial and institutional strengthening reforms across city agencies
• Second, targeted, market-building solutions that prepare both the city agencies and investors to participate in market-based financing mechanisms.

Municipal bonds–and debt, more widely–can contribute to bridging India’s infrastructure financing gap and can be a viable funding mechanism for a wide range of capable city agencies.