New Delhi, May 13 -- India's market regulator has proposed a revamp of municipal bond regulations aimed at making it easier for urban bodies to raise debt while tightening disclosure and investor protection norms.

Pooled bond issuances by multiple municipalities, stricter rules on use of proceeds, enhanced refinancing disclosures and measures to boost retail participation are among the suggestions the Securities and Exchange Board of India (Sebi) made in a consultation paper issued on Wednesday.

The move comes as India's rapid urbanization increases pressure on local governments to fund roads, sewage systems, transport networks and water infrastructure. Sebi said municipal corporations require a "quantum rise" in spending to meet urban ...