After Pune Municipal Corporation, the New Delhi Municipal Corporation (NDMC) is likely to float municipal bonds for around Rs 500 crore in the next three-four weeks, sources said. Along with Navi Mumbai and Pune munocipal bodies, NDMC has a credit rating of AA+. NDMC derives its income from four main sources, which in order of importance are charges from sale of electricity, income from municipal works, property taxes and charges from sale of water. The municipal body plans to use the funds for proposed projects including smart school, digital interactive panels, smart parking, smart dustbins, smart roads and smart healthcare services, as it attempts to meet its smart city mission, a senior government official said. “This bond issue will be guaranteed by the central government,” the official said. NDMC is one of the first twenty cities selected under Smart Cities Mission of the central government. It has formed a special purpose vehicle (SPV) namely “New Delhi Municipal Council Smart City”.
“The SPV has received a grant of Rs 194 crore from the urban development ministry, and Rs 56 crore from NDMC, thereby bringing the seed capital to Rs 250 crore,” the official added. On Tuesday, minister of housing and urban poverty alleviation Venkaiah Naidu said the first municipal bond issue under the government from Pune Municipal Corporation will be listed on the BSE on June 23. The ministry of urban development is promoting credit rating of cities as one of the five transformational reforms under which about 500 cities and towns that account for about 65% of the total urban population were to be given credit ratings during this year. Credit ratings are assigned on the basis of assets and liabilities of urban local bodies, revenue streams, resources available for capital investments, double entry accounting practise and other governance practices.
By Surbhi Prasad