GZB Nagar Nigam should issue Municipal Bonds to raise money for Infrastructure

President of the Flat Owner Federation Ghaziabad Col Tejandra Pal Tyagi raised the issue of Municipal Bonds in today’s GBM(General Body Meeting). All members of the Federation agreed with the proposal and demanded in one voice that we want complete Infrastructure and for that let the GZB Nagar Nigam issue Revenue Municipal Bonds which some other Municipalities have already resorted to. This money can not be diverted to paying of salaries which generally happens to all grants received by the Nagar Nigam up to an extent of about 80%.
Infrastructure must grow in proportion to the need and increase of population, present and 10 years ahead. The Urban Population is increasing at a rate of about 30% per annum. A Nagar Nigam can raise about Rs 1500 crore per year as per one estimate. This amount will be over and above the money received by the Nagar Nigam through the center & state govt, taxation, stamp duty and fines. Provision exist to get the Municipal Bonds listed on the Stock Exchange since 2001.Clause vii of section 10(15) of the IT Act makes the Municipal Bond Tax Free and hence it is an extra attraction for the Byers of the Bond. Not only that every buyer will act as a watch dog for the project for which the Revenue Municipal Bonds have been issued: he will also feel his involvement and participation in the development of the City. The Central Govt is also thinking to remove the 8% tax cap on Municipal Bonds and also a proposal is in currency to ask HUDCO to give 80% loan for infrastructure to municipalities if they are ready to raise 20% from the Bonds.
Most Govt Projects do not succeed because they do not include those for whom the Project was formulated. And hence, it will be in the fitness of things to associate RWAs with raising of Municipal Bonds,” said Mukesh Agarwal, Secy”.
This point was also raised during the 5th National Conference of RWAs in Mumbai on 19th Nov 2017 in front of the Hon’ble Minister of Urban Development Shri Hardeep Singh Puri ji who had readily agreed to the suggestion there and then in front of about 600 Delegates of RWAs truly from all over the Country. Ahemdabad, Bangalore and Chennai Municipalities have issued Municipal Bonds in the past and therefore are performing well.
A letter to to Hon’ble Minister as a part of the follow up action is attached in the aforementioned issue.
The Zonal Commanders of Flat Owners Federation Shri Tarun Bharat Chauhan, Shri Atul Tyagi, Smt Anuranjana, Shri CM Vaid and Shri Atul Tyagi from different zones of Ghaziabad that times have changed and we have to adopt new strategies to raise funds and provide adequate Infrastructure to the People.