GBA nudge to corporations to transfer funds raised through municipal bonds to BSMILE, opposed

GBA's proposal to redirect municipal bond funds to B-SMILE faces resistance from corporations prioritizing autonomy and smaller projects.

In a bid to mobilise more funds for projects to be taken up by Bengaluru Smart Infrastructure Limited (B-SMILE), an SPV formed to spearhead bigticket projects, the Greater Bengaluru Authority (GBA) is planning to tap into funds raised by the five city corporations through municipal bonds- ₹200 crore each, totalling to ₹1,000 crore.

However, multiple corporations are resisting the proposal, arguing they had already given enough funds to the B-SMILE and have cited better uses for the funds raised through municipal bonds elsewhere.

While the GBA is a pan city body, the five corporations are autonomous bodies and cannot be forced to part with their funds. The nudge by the GBA to transfer the funds raised through municipal bonds to the B-SMILE and the resistance from corporations to do so, will likely be the first instance where the autonomy of the five corporations, under the new set-up, will be tested.

Sources said the GBA wants the corporations to transfer the funds raised through municipal bonds to the B-SMILE to fund 13 elevated corridors to be built at an estimated cost of ₹18,000 crore. The Draft Detailed Project Reports (DPR) are ready for these projects.

Sources said the argument has been that the funds transferred from corporations would be used for elevated corridors in the jurisdiction of the respective corporations.

Resistance from a few corporations also stem from the fact that the five corporations have already allotted 14% of their total outlay- ₹2,840.55 crore of ₹20,217.66 crore to the B-SMILE. If municipal bonds funds are added then nearly 20% of the total outlay will be cornered by the B-SMILE.