Thursday October 4, 02:59 AM
Bengal minister for civic bodies to issue tax-free bonds
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By Economy Bureau
The West Bengal government wants the municipalities to issue tax-free bonds to raise funds from the market. State urban development & municipal affairs minister Asok Bhattacharyya said most of the municipalities are unable to get the projects under the Jawaharlal Nehru Urban Development Mission (JNURM) as they do not have funds to match financial arrangements. For getting the JNURM schemes, a municipality has to provide 50% of the project cost with the Centre and the state government provide 35% and 15%, respectively, as grants under mission 1. Under Sub-mission-2, a municipality has to provide at leat 20% of the project cost with 50% of it coming from the Centre and rest from the state government as grants. Bhattacharyya said that 6-7 municipalities could join hands to issue bonds. But, before the small municipalities issue bonds, the state government would create a West Bengal Municipal Development Fund with a corpus of around Rs 150 crore, from where municipalities can avail themselves of the soft loan. The British Department for International Development (DFID) and the state government will contribute for creating the fund and muncipalities can participate as equity partners. Municipalities, to get loans from the fund, would require credit rating done, Bhattacharyya said. Bhattacharryya was speaking at an interactive session organised by the Merchants' Chamber of Commerce. He said that the government has prepared a draft rehabilitation policy. It has proposed that the implmenting agency of a project will have to purchase land directly from farmers through a procurement committee. The committee will directly negotiate with landowners within the price band fixed by the district magistrate in consultation with the land & land revenue department. "This will reduce the hard feeling about acquisition," Bhattacharyya said. The policy would first be implemented in the integrated city that DLF is setting up in Dankuni on 4840 acres. The city would have around 980 acres marked for industry, Bhattachryya said.
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