Funds under JNURRM not enough: Top official

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New Delhi, Sep 16 (UNI) The urban local bodies will need to leverage the funds available under Jawaharlal Nehru National Urban Renewal Mission (JNNURM) in order to access alternate sources of funding and also take necessary steps to improve their own financial health, Dr M Ramachandran, Secretary, Urban Development Ministry today said.

Funds to the tune of Rs 3,35,000 crores will be required to cater to the basic infrastructure needs of 63 Mission cities for the seven year period, he said.

''The available public funding will not be sufficient to cover the infrastructure investment requirements for urban India,'' he said, after inaugurating a workshop on "Financial Leveraging for Urban Infrastructure Investments in the context of JNNURM" here today.

Though projects to the tune of Rs 32,232.32 crores have been approved, with an Additional Central Assistance (ACA) commitment of Rs 15,651.65 crores under the urban infrastructure and governance Sub-Mission of JNNURM, this was not adequate, he said.

''As compared to the Central support for urban infrastructure development before the commencement of the Mission, these figures seem high. But in the context overall capital investment requirements in the 63 Mission Cities as well as the urban centres across the country, the scale of investment is clearly inadequate to meet the requirements,'' he stressed.

He said of the Rs 335,000 crores funds required to cater to the basic infrastructure needs of the Mission cities, approximately Rs 2,77,000 crores, accounting for 82 per cent of the capital investment requirements will be required for the Urban Infrastructure&Governance Sub-Mission.

He further stated that the Urban Local Bodies in the Mission Cities will have to invest around Rs 98,000 crores by way of their contribution under the Mission, (based on the funding pattern of the investments, which are dependent on the city category). Therefore, taken into account the investment requirements for all the 5,161 urban centres across the country, a capital investment of around Rs 8,00,000 crores was required as per the estimates.

The Secretary said the rating exercise undertaken by the four credit rating agencies in North India revealed that out of the 22 ULBs where the rating exercise was complete, only one urban local bodies (ULBs), Chandigarh Municipal Corporation has achieved a rating of A+, and only eight have achieved an investment grade rating of BBB-.

Expressing his concern, the Secretary said the credit rating needed to be accorded due importance by the Urban Local Bodies, as the long term objective of the Mission was to create financially sustainable institutions of local self governance. He advised that a raft of measures like strengthening institutional capacity, improving revenue mobilisation, focus on public private partnership and systematic devolution of funds were necessary to improve the institutional capacity and financial position of the ULBs.

He emphasised that the Urban Local Bodies will need to look beyond their own sources of revenue and leverage, available sources of financing to augment their corpus of investible funds.

The credit rating exercise initiated by the Ministry of Urban Development and carried out under the aegis of the Mission was a crucial step in enabling the ULBs to be fully cognizant of their overall financial position and credit worthiness. This will in turn enable the ULBs to access various avenues of institutional finance and also to undertake revenue enhancement as well as cost reduction measures to strengthen their overall financial standing.

This is the fourth and final regional seminar organised by the Ministry of Urban Development in collaboration with the Union Bank of India, the first three being held in Bangalore, Mumbai and Calcutta.

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