[ecis2016.org] Union Urban Development Minister M Venkaiah Naidu has asked municipal bodies to look at avenues to raise funds locally, instead of expecting funds from the central and state governments, for development projects
Union Urban Development Minister Venkaiah Naidu, on June 22, 2017, exhorted municipal bodies to ‘start looking inward and raise money.’ There is enough money in the system but the local bodies need to tap them efficiently, through various modes of funding, he said.
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Naidu, who was in Mumbai, to attend the listing of the Rs 200-crore bond by the Pune Municipal Corporation (PMC) on the Bombay Stock Exchange (BSE) said, “The listing of the PMC bonds marks urban revival in the country. This event is going to have a wider impact on urban development.” The PMC has raised Rs 200 crores, by selling 10-year bonds at a coupon of 7.59 per cent. The issue was oversubscribed six times. The proceeds will be used for a Rs 2,300-crore water project.
The minister assured that the centre will fund any developmental project undertaken by municipal local bodies but it is necessary that they should actively participate, in raising resources for providing the necessary infrastructure and amenities to the citizens. He, however, noted that the resources should be raised in the most transparent manner.
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“Prime Minister Narendra Modi has said that at least 10 cities, should issue municipal bonds within a year. Other cities should now follow Pune and Ahmedabad,” Naidu said. Union Minister of State for Finance and Corporate Affairs Arjun Meghwal, who was also present at the listing, said the capital market’s health is improving and cities should take the benefit of it and become self-sufficient in raising funds. On the occasion, Maharashtra chief minister, Devendra Fadnavis said, creating infrastructure should be perceived as a business model and local bodies should look at proper options, with bankable propositions.
SEBI chairman Ajay Tyagi, said local bodies need to be more disciplined in maintaining their accounts and systems, to make the bonds issued by them trade-worthy. “They should have a proper credit system in place, to ensure investor confidence in repayment of the bonds,” the SEBI chief said. SBI chairman Arundhati Bhattacharya said, such bonds will reduce the dependency of the municipal corporations and improve their fiscal position.
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