Bhopal Municipal Corporation to Issue Rs 200 Crore Bonds Under AMRUT 2.0 Scheme
The Bhopal Municipal Corporation (BMC) is gearing up to raise an additional Rs 200 crore through municipal bonds as part of the AMRUT 2.0 initiative. This move comes on top of the Rs 175 crore borrowed by the civic body back in 2018. When combined, these bond issuances will elevate the BMC to one of the largest municipal borrowers in India, with a staggering total debt of Rs 375 crore.
Financial Burden Shifts to Residents Through Tax Hikes
To manage its growing debt obligations, the BMC has implemented a series of tax and cess increases affecting local households. Key measures include:
- A 15% hike in water cess implemented in April 2025
- A 10% rise in property tax during the same period
- Various increases in solid waste charges and sewerage fees
These adjustments mark the first tax increases since pandemic-related pauses in 2021, representing a significant shift from the previous administration under Mayor Alok Sharma (2013–2018), when residents enjoyed five consecutive years without any tax hikes.
Controversy Surrounds Bond-Funded Projects
Bhopal Mayor Malti Rai has defended the bond issuance strategy, stating that "BMC will raise bonds to sustain projects under AMRUT 2.0" while ruling out immediate additional tax increases. The corporation has branded these as green bonds, specifically earmarked for water supply and sewage infrastructure improvements in the state capital.
However, opposition leaders have raised serious concerns about transparency and financial sustainability. BMC Leader of Opposition Sabista Zaki criticized the approach, noting that "BMC's revenues have not grown in line with its debt servicing and the burden will eventually fall on city residents."
Mounting Interest Payments Compound Financial Pressure
The financial implications are becoming increasingly substantial:
- The 2018 bond already costs BMC Rs 16.7 crore annually in interest payments
- With the new Rs 200 crore bond issue, interest payments are projected to double to approximately Rs 33 crore per year
- This creates ongoing financial pressure that must be addressed through municipal revenues
Future Projects and Resident Concerns
The upcoming bond proceeds are intended to fund several critical infrastructure projects:
- Water supply system improvements
- Sewage network upgrades
- Introduction of electric buses for public transportation
For Bhopal families already grappling with rising living costs, the central question extends beyond which projects will be implemented. Residents are increasingly concerned about how much additional financial burden they will bear to support the city's growing debt portfolio and ensure the sustainability of these municipal initiatives.
