‘Cities should raise funds from local markets’

Municipal bodies should raise funds locally instead of expecting financial support from centre and states, said Union Urban Development Minister M Venkaiah Naidu.
‘Cities should raise funds from local markets’

MUMBAI: Municipal bodies should raise funds locally instead of expecting financial support from centre and states, said Union Urban Development Minister M Venkaiah Naidu.
Speaking at the listing for the Rs 200 crore bond by the Pune Municipal Corporation (PMC) on BSE, in Mumbai on Thursday, Naidu said there was enough money in the system and local bodies need to tap them efficiently through various modes of funding.

“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 time has come when cities (local bodies) start looking inward and raise money,” he said.
PMC raised Rs 200 crore selling 10-year bonds at a coupon of 7.59 per cent and the proceeds will be used for a Rs 2,300-crore water project.
According to Naidu, Prime Minister Narendra Modi has said that at least 10 cities should issue municipal bonds within a year.

SEBI Chairman, Ajay Tyagi emphasised that local bodies need to be more disciplined in maintaining their accounts and system 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 bonds,” he added.

Meanwhile, Naidu said seeking loan waiver has become a “fashion” but should be considered only in extreme situations. Recently, several state governments, despite precarious finances have announced waivers and more are expected to follow suit.
“Seeking loan waiver has become a fashion these days. But waiving off loans is not the final solution and it should be considered in extreme situations,” he added.

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The New Indian Express
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