Madhya Pradesh Considers Temple Bond Issue Underwritten by Donations

Madhya Pradesh Government Launches "Temple Bond" Issue for Religious Site Development

The Madhya Pradesh government has initiated a groundbreaking financial move by floating a "temple bond" issue to fund the development and upgradation of 11 religious sites in Ujjain and adjoining areas. This innovative move is seen as the first of its kind in the financial markets.

According to Asheesh Singh, Ujjain Divisional commissioner, the temple bond issue aims to raise Rs 200 crore, with the transaction expected to be completed by the end of August or the beginning of September after receiving regulatory authorities' approval. The bonds will be backed by the Ujjain Development Authority (UDA), a state government entity.

UDA will sign agreements with the 11 temple committees, which will utilize donations and offerings at these sites to repay the bonds. The project has been linked to the Centre's Urban Challenge Fund (UCF), which will also contribute to funding the plan, while the remaining amount will come from bank financing.

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The temple development project involves the upgradation of 11 religious sites, with the aim of increasing the number of visitors, which in turn will add to donations and offerings from pilgrims. According to Singh, on average, 60,000 people visit the Kaal Bhairav temple daily, while on weekends, the number increases to 70,000-80,000.

This innovative approach is seen as a template for raising funds for upgrading and development of other key religious sites across the country. The buzz around temple bonds is expected to attract investor attention and secure a good coupon rate.

The project has been hailed as a positive development, as it addresses the cash-strapped municipal corporations' ability to drive urban development effectively. A report by the Reserve Bank of India (RBI) noted that an increase in municipal bond financing is a positive development, but it remains modest.

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Singh, an officer of the 2010 batch of the Indian Administrative Service (IAS), has successfully raised funds through municipal and green bonds during his stint in Indore. He is confident that the temple bond issue will receive a good response from the public.

Plans are on track for road shows at NSE and BSE, as well as meetings with large fund managers, to attract investor attention and secure a good coupon rate. With this innovative approach, the Madhya Pradesh government is set to raise funds for the development of religious sites, while also setting a precedent for other states to follow.