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Finance and PTC Financial have similar plans and their capacity to offer 3.2
faster financial closure than traditional banks can act to their advantage.
Indian companies can also learn from countries which have developed
the municipal bond market. Municipal bonds can help city corporations
raise funds without looking for grants from state or central government
or loans from international agencies. The municipal bond market in
India, albeit more than a decade and a half old, is still at a nascent
stage. After 2010, no municipal bonds were issued and the market
has been dormant due to low ratings, reluctant investors, and unclear
regulations (Chakrabarti 2014). On a positive note though, the rating
agency, CARE, estimates that INR 1,000–INR 1,500 crore (approx. USD
166.67–250 million) could be raised by way of municipal bonds every
year over the next five years by the larger urban local bodies with
investment grade. Thus, municipal/local bonds hold large untapped
potential waiting to be explored to bring about sustained development
in infrastructure and fund green projects.
Although larger issues of standardization, credibility, and proper
classification of bonds as ‘green’ are yet to be taken care of, credit
enhancement and larger participation from other eligible entities could
still help India leverage the early mover position in the burgeoning
green bonds market. Under that scenario, India should remain hopeful
of the opportunity green bonds provide to raise capital to fund its
green ventures.
2.2.3 Risk Management Tools
Two-thirds of the Indian population depends on agriculture to live,
which is a sufficient reason to demonstrate the importance of crop
insurance in this country. In 2013, the National Crop Insurance
Program (NCIP) was introduced which merged Modified National
Agricultural Insurance Scheme (MNAIS), Pilot Weather Based Crop
Insurance Scheme (WBCIS), and Pilot Coconut Palm Insurance Scheme
(CPIS), existing at that time.
MNAIS provides for insurance cover and financial support to the
farmers in the event of prevented sowing and failure of any of the
notified crops as a result of natural calamities, pests, and diseases.
WBCIS aims to reduce hardships faced by insured farmers on account
of financial loss caused due to crop loss resulting from incidences of
adverse weather conditions. CPIS assists coconut growers in insuring
coconut palms against natural and other perils.
The NAIS which started in 1999 has been quite successful in insuring
farmers and is sponsored by the Indian government. Any farmer can
Chapter 2 Innovative Financing for Low Carbon Development 261
faster financial closure than traditional banks can act to their advantage.
Indian companies can also learn from countries which have developed
the municipal bond market. Municipal bonds can help city corporations
raise funds without looking for grants from state or central government
or loans from international agencies. The municipal bond market in
India, albeit more than a decade and a half old, is still at a nascent
stage. After 2010, no municipal bonds were issued and the market
has been dormant due to low ratings, reluctant investors, and unclear
regulations (Chakrabarti 2014). On a positive note though, the rating
agency, CARE, estimates that INR 1,000–INR 1,500 crore (approx. USD
166.67–250 million) could be raised by way of municipal bonds every
year over the next five years by the larger urban local bodies with
investment grade. Thus, municipal/local bonds hold large untapped
potential waiting to be explored to bring about sustained development
in infrastructure and fund green projects.
Although larger issues of standardization, credibility, and proper
classification of bonds as ‘green’ are yet to be taken care of, credit
enhancement and larger participation from other eligible entities could
still help India leverage the early mover position in the burgeoning
green bonds market. Under that scenario, India should remain hopeful
of the opportunity green bonds provide to raise capital to fund its
green ventures.
2.2.3 Risk Management Tools
Two-thirds of the Indian population depends on agriculture to live,
which is a sufficient reason to demonstrate the importance of crop
insurance in this country. In 2013, the National Crop Insurance
Program (NCIP) was introduced which merged Modified National
Agricultural Insurance Scheme (MNAIS), Pilot Weather Based Crop
Insurance Scheme (WBCIS), and Pilot Coconut Palm Insurance Scheme
(CPIS), existing at that time.
MNAIS provides for insurance cover and financial support to the
farmers in the event of prevented sowing and failure of any of the
notified crops as a result of natural calamities, pests, and diseases.
WBCIS aims to reduce hardships faced by insured farmers on account
of financial loss caused due to crop loss resulting from incidences of
adverse weather conditions. CPIS assists coconut growers in insuring
coconut palms against natural and other perils.
The NAIS which started in 1999 has been quite successful in insuring
farmers and is sponsored by the Indian government. Any farmer can
Chapter 2 Innovative Financing for Low Carbon Development 261
