14/06/2017
PUNE: The Pune
Municipal Corporation has to ensure its accounts are prepared on time, their
audit is carried out by an independent agency, financial and operational
data is made public and it complies with all eligibility requirements put
forth by Sebi and the state government to successfully raise money through
bonds.
According to experts, the PMC has to comply with disclosure
standards adopted by the private sector to boost investor confidence and bond
subscriptions. "Going by the PMC's history, these conditions would prove a
major challenge for the civic body. It is not clear what will PMC do with bonds
and how it will respond to the market. Is the civic body capable of this
venture?" asked senior Congress leader Arvind Shinde, who opposed the
PMC's move in the recent general body meeting.
Opposition leaders claimed the civic administration’s insistence
on bonds was "suspicious" as there were no efforts to look for other
revenue resources. The leader of Opposition in the PMC, Chetan Tupe, insisted
the civic administration's hurry to go for bonds was not understandable.
"The administration is acting like bonds is the only option left before
the PMC to complete the water project," he said.
The civic administration, on the other hand, stressed it was
going according to the state and the central government's directives. The civic
body officials stated the PMC would have to go for bonds because only a part of
the capital requirement could be met through the funds from the central and
state governments.
"This is a first major effort to raise money by floating
bonds. The BJP-led government is fully backing the civic administration. Hence,
even local BJP leaders have no say in the proposal. The administration is
directly dealing with the government and so the PMC will go ahead with
bonds," said a senior civic official, admitting that the PMC would have to
bring tremendous changes in its financial structure and functioning once bonds
came into the market.
In March 2015, the SEBI passed regulations to facilitate
issuance of municipal debt and listing of debt securities by municipalities in
India. This will enable investment in public infrastructure of the 100 Smart
Cities, including Pune. The 14th Finance Commission has allocated Rs17,400
crore to municipalities for the period 2016-20 as performance grants are tied
to conditions, which, when complied to, will help municipalities raise money
from the markets.
0 comments:
Post a Comment