City-level GDP data, he said, could help municipal bodies make better decisions on needed infrastructure and investment, and also leverage their economic strength to raise funds to finance their needs. Mr. Kumar pointed out that the Pune municipal corporation — which he headed till recently — had been able to raise Rs. 200 crore in municipal bonds at a respectable 7.59% rate, but could have aimed higher given that its annual budget is well over Rs. 4,000 crore. “That ambition to raise funds from the market will come once they start benchmarking their economies,” he said. One of the aims of the Smart Cities Mission has been to increase the share of municipal financing of infrastructure projects. The EIU has recommended a top-down approach based on sectoral income data for the calculation of city-level GDP as it would balance detail and resource-effectiveness in the long term.
