Towards Atmanirbhar cities
From 2004 to 2014, the total expenditure on urban development in 10 years was around Rs 1.57 lakh crore. Over the past six years, this figure has been Rs 10.57 lakh crore. A 2010 Mckinsey & Company report estimates that by 2030, 40 per cent of our population or 590 million Indians are expected to live in cities. To cater to this growing urban population, India has to build 700-900 million square meters of urban space every year until 2030- a new Chicago every year from now till 2030 to meet our urban demands, which also means 70% of India of the future is yet to be built. The challenge, and opportunity, is not only to transform our cities into robust economic behemoths but to also improve the living conditions for millions of Indians over the next decade.
On December 2, Chief Minister of Uttar Pradesh Yogi Adityanath attended the bell ceremony at the National Stock Exchange in Mumbai, as municipal bonds worth Rs. 200 crore were listed for issuance for the Lucknow Municipal Corporation. The issuance was oversubscribed 2.25 times and at a yield rate of 8.5%, it is the second lowest rate for a municipal issuance in the country. Lucknow has now become the 9th city across India to raise municipal bonds and the first from North India since the launch of Atal Mission for Urban Rejuvenation and Transformation (AMRUT) mission. LMC will get approximately Rs 26 Cr as an upfront incentive of around 2% to subsidise its interest burden from the Union Government. Till now over Rs 3690 crore has been raised by 9 cities and many more cities are in the process of doing so.
This will help improve financial and municipal governance, orient the city towards self-sufficiency or Atmanirbharta and provide the necessary support for developing civic infrastructure. From earlier times when municipal corporations were bankrupt, had nowhere with or capacity to raise funds, had little inclination or capability to collect taxes and had extremely low service delivery standards, the demonstrated capacity to float municipal bonds and raise finances represents a sea-change.
Led by the Hon’ble PM’s foresight and vision, the programmatic and policy interventions of the Union Government have aimed to improve the holistic well-being of our citizens living in urban centres. The Central Government’s missions focus on building capacity amongst our Urban Local Bodies while leveraging new technologies and creating market finance accessibility for our cities.
AMRUT Mission has proven to be a critical driver of our efforts. It has consolidated the emerging potential for development presented by the success of other missions under MoHUA. One crucial reform has been the Credit Rating of Mission cities. This reform has been taken up on the rationale that Urban Local Bodies of Mission cities need to raise funds from additional sources, including borrowings from Capital Markets or Private Investors for financing different urban improvement projects. The credit rating exercise also leveraged the help of partners like the US Treasury Department and SEBI Municipal Bonds Advisory Council, which has brought in dedicated expertise and global perspective.
Till date, credit rating work for 485 AMRUT cities have been commissioned, of which the job has been completed for 469 cities.
(To be contd)