BMC gets top credit rating among local bodies across India
The Brihanmumbai Municipal Corporation and the Navi Mumbai Municipal Corporation have been awarded an ‘AA’ credit rating by rating agencies such as CRISIL, FITCH, CARE and ICRA.mumbai Updated: Mar 03, 2010 02:05 IST
The Brihanmumbai Municipal Corporation and the Navi Mumbai Municipal Corporation have been awarded an ‘AA’ credit rating by rating agencies such as CRISIL, FITCH, CARE and ICRA.
An ‘AA’ rating implies a high level of credit worthiness — the ability to return money raised through loans and bonds —of these local bodies.
“One of the main factors that the rating agencies have taken into consideration is the financial soundness of the urban local bodies ULBs, regularity of source of income, their efficiency in revenue collection and so on. ULBs across Maharshtra have topped the list,” said M Ramachandran, secretary, Urban Development Ministry.
The ratings have been carried out to assess the credit worthiness of the ULBs in different cities, which will help them to raise money from the market to fund various infrastructure projects in their respective cities. UD Ministry officials said that based on their ratings, ULBs can raise money from the market by floating municipal bonds or other forms of debt to meet the funding gap.
The ratings are part of an ongoing credit rating survey commissioned by Union Urban Development (UD) Ministry and carried out by the rating agencies.
The survey — carried out in 62 ULBs spread across 25 states — has awarded investment grade rating to a total of 38 municipalities. These are in states like Tamil Nadu, Chandigarh, Chhattisgarh, Himachal Pradesh, West Bengal, Uttarakhand, Karnataka, Kerala, Jharkhand, among others.
Ramachandran said: “The rating is being done to assess the current financial health of each ULB and sensitise them as to how they can improve their performance by implementing reforms.”