Moreover, urban local bodies are expected to make a cautious re-entry into the bond markets, with municipal bond issuance expected to remain under Rs. 0.2 trillion, to fund their share of projects under Smart Cities and Amrut. In contrast, the UDAY bonds issued by states to replace their Discoms' debt from banks, would taper off in the immediate term, with most states likely to complete such issuance in FY2017; ICRA estimates that UDAY bond issuance would decline to Rs. 0.2 trillion in FY2018-FY2021 from Rs. 1.2 trillion in FY2017. As a result, ICRA expects the total gross bond issuance by the three tiers of government to remain steady at Rs. 10.7 trillion in FY2018. Benefitting from finer pricing in the bond markets, ICRA expects the year-on-year (YoY) growth of corporate bonds to remain substantial at 20-22% in FY2018. In absolute terms, the gross corporate bond issuance is expected to increase to Rs. 8.5 trillion in FY2018 from an estimated Rs. 7.1 trillion in FY2017.