Patna Municipal Corporation will become the first municipal body of the state to enter the stock market. photo awakening
Jagran correspondent, Patna. Patna Municipal Corporation (PMC) is going to start the process of issuing municipal bonds with the aim of developing infrastructure and expanding civic amenities for its population of 30 lakh. Municipal Commissioner Yashpal Meena said that this bond will be issued in April.
It aims to be listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) in August. There is a plan to raise about Rs 200 crore through this bond, which will be a safe investment option for investors. It will also strengthen the financial self-reliance of PMC. This will reduce dependence on central and state governments.
PMC is busy completing the necessary processes for issuing municipal bonds. To run it smoothly, a bond issue committee will be formed, which will be headed by the Municipal Commissioner. This committee will be authorized to determine the type and nature of the bonds, appoint the relevant intermediary agencies, enter into necessary agreements and finalize all the terms and conditions of the issue.
In December, a delegation of senior Bihar government officials visited Mumbai and Nashik, which included Municipal Commissioner Yashpal Meena. During this visit, on 17 December, the delegation visited the headquarters of NSE India, where information was obtained about various options for raising resources through the capital market. The next day a visit was made to Nashik Municipal Corporation, where procedures related to fund-raising including municipal bonds were discussed.
PMC will become financially self-reliant and sustainable
Municipal Commissioner Yashpal Meena recently held a meeting with the concerned officials regarding the issuance of municipal bonds. He said that through this bond the city will not only develop in a modern form but will also become financially self-reliant and empowered.
This will improve the water supply system, strengthen roads and also improve the quality of sanitation services. The powerful Standing Committee of the Municipal Corporation has already approved the Municipal Bond. Apart from this, this bond has also been included in the agenda of the 10th general meeting of the Corporation Council proposed on February 7.
Credit rating from SEBI approved agency mandatory
The municipal bond issuance process takes place in several stages. First of all, the corporation has to obtain permission from the state government, in which it is assessed whether the financial condition of the municipal corporation is eligible to issue bonds or not. This is followed by the process of financial audit and rectification, which involves submission of regularly audited balance sheets, records of permanent income such as property tax and water tax.
Finally, rating is done from a credit rating agency approved by the Securities and Exchange Board of India (SEBI). A rating of A or better is generally considered necessary. The structure of the bond is then decided, which includes the amount to be raised, interest rate, tenure and whether it will be tax free or taxable. The first municipal body in India to issue municipal bonds is Bengaluru Municipal Corporation.
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