Big Boost For Corporate, Municipal Bond Market In Union Budget

New Delhi, Feb 1 (KNN) Finance Minister Nirmala Sitharaman, while presenting the Union Budget 2026–27 in Parliament on Sunday, announced measures aimed at strengthening the corporate bond market and encouraging larger municipal bond issuances.

To improve liquidity and depth in the corporate bond market, the Minister proposed the introduction of a market-making framework with appropriate access to funds and derivatives linked to corporate bond indices.

She also announced plans to introduce total return swaps on corporate bonds, a move expected to enhance risk management and investor participation.

To promote higher-value municipal bond issuances by large cities, the government proposed an incentive of Rs 100 crore for a single bond issuance exceeding Rs 1,000 crore.

At the same time, the existing incentive scheme under Atal Mission for Rejuvenation and Urban Transformation (AMRUT), which supports municipal bond issuances of up to Rs 200 crore, will continue to benefit small and medium towns.

(KNN Bureau)