After the sanitation ratings, it is time for the cities to look out for the “surveillance ratings” being carried out by rating agencies for various urban local bodies (ULBs) in the country. These ratings are crucial as they may be used by the cities to leverage funds from financial institutions, both national and international.
The urban development ministry has authorised CRISIL, ICRA and FITCH to carry out credit ratings for the cities. The “surveillance ratings” is the second part of the credit rating exercise where it will be seen if the ULBs have shown any improvement. The “surveillance ratings” for all the cities will be released after the process, which is currently going on, is completed. In a review last month, it was revealed that 16 ULBs have been assigned with “surveillance ratings”.
Talking exclusively to this newspaper, Urban Development Secretary M. Ramachandran said that the financial institutions would like to see if the cities had the requisite capacity to utilise the funds and repay the loans they get. “Even commercial banks may be interested in dealing with them provided the cities reach that point where they can gainfully utilise the funds,” said the urban development secretary.
In fact, in order to be able to leverage funds from financial institutions, the cities will have to work out on ways to improve their own revenues like better collection of property tax, besides increasing the tax net, and levying user charges. “Also, the cities will have to strengthen and professionalise their cadres. They should be able to deal with modern technologies and accounting systems. The traditional approach is not adequate to meet modern day requirements,” said Dr Ramachandran.
The ministry is depending on cities being able to generate their own revenues and work out public-private partnerships at their level to fund the next phase of urban renewal.