Varanasi, Dec 30 (IANS): Varanasi is all set to be the second city after Lucknow in Uttar Pradesh to raise Rs 200 crore through municipal bonds.
The Varanasi Municipal Corporation (VMC) has started preparing the bond in the parliamentary constituency of Prime Minister Narendra Modi. The funds raised through this bond would be invested in various infrastructure schemes and the development of Varanasi.
This bond would also attract investors to invest in the city and promote the tourism sector which would further help in increasing the revenue of the state government.
Work to develop the Ghats, Ring Road, Sri Kashi Vishwanath Dham, Khirkiya Ghat, Rudraksha Convention Centre, flyover, CNG boats on the Ganga, inland waterways, airways connectivity, a modern medical system and promotion of tourism is being done.
With the increase in the area of the municipal corporation, 89 new revenue villages have also been added and the increase in income would promote development in the newly-added areas.
According to Municipal Commissioner Gaurang Rathi,"For issuing municipal bonds, a consultant firm/merchant banker will be selected through the tender process. Nine companies can participate according to the guideline of the Department of Municipal Development, Government of India which includes AK Capital Services Limited, Axis Bank Limited, Darashaw & Company Private Limited, ICICI Bank Limited, ICRA Management Consulting Services Limited, SBI Capital Market Limited, Spa Capital Advisor Limited, SREI Infrastructure Finance Limited and Yes Bank Limited."
Municipal Corporation Chief Accounts Officer, Manoj Tripathi, said,"CRISIL, ICRA, CARE, etc, are working agencies, of which two agencies need to be rated. Municipal bodies of 'AA' (Double-A) or 'AAA' (Triple-A) can issue bonds but the current investment rating of Varanasi Municipal Corporation is 'BBB' (Triple-B) which is required to be reformed and converted into 'AA' (Double-A) for investment."
A committee under the chairmanship of the Additional Commissioner has also been constituted for the bond-related proceedings in the Municipal Corporation.
The official opined that a municipal bond is a kind of credit card from which funds are raised. In this, a bond issuing institution borrows money from the market for a fixed time and guarantees to return the principal amount along with the interest.