WB, ADB May Lend Directly To Urban Bodies

NEW DELHI: The government may allow multilateral funding agencies such as World Bank and Asian Development Bank (ADB) to directly extend debt to urban local bodies (ULB).

At present, the grants are routed through the central government, which passes it to the states. The move is expected to provide an alternative portfolio of fund-raising to ULBs marred by finance constraints. It will also fast-track the process of fund-raising for developmental activities.

The urban development ministry is considering the proposal to allow the multilateral agencies extend financial support to ULBs.

“We would shortly hold a meeting with the finance ministry officials to arrive at a possible decision on allowing the agencies grant funds to our ULBs,” a senior urban development ministry official said.

The officials are of the view that new system of credit rating would help ULBs leverage funds from World Bank and ADB for adequate infrastructure investments. The credit-rating exercise has been completed in 43 ULBs. Of these, only two have reached the AA-level.

“There is tremendous potential for the cities to be converted into dynamic growth centres. The change can be expedited only if the ULBs streamline their finances,” an official said.

Sixty-three cities under Jawaharlal National Urban Renewal Mission (JNNURM) will need Rs 54,000 crore towards improving water supply, sewerage and sanitation, drainage upgradation and solid waste management. In the transport sector, he said, funds of Rs 1,33,000 crore will be required to take urban mobility to higher levels.

So far, 314 projects worth Rs 26,000 crore have been approved and, of these, 90 projects are expected to be completed by December 2008. The government plans to raise Rs 20,000 crore from institutional and multilateral agencies and another Rs 2,000 crore from the private sector.

“The routing of funds through the Centre for states takes a lot of time. The huge time gap would be bridged once ULBs are permitted to get funds directly from multilateral agencies,” the official said.

Another lucrative avenue of raising funds is through tapping the bond market. ULBs can raise enough resources through municipal bonds. The scheme has been launched in 10 states.

WB, OECD Won't Get To Rate Co Governance

NEW DELHI: In what is being seen as a move to protect the Indian corporates from criticism on the global arena, the government has said it would not allow either the World Bank or the Organisation for Economic Cooperation and Development (OECD) to rate corporate governance of Indian companies on the parameters set by them.

The norms adopted by these international bodies are best suited to the developed countries and not for countries like India which are still catching up with such practises, the government has argued.

If the World Bank is allowed to rate the Indian corporate about corporate governance, industry representatives feel, it would have dented the image of companies like IOC, Gail, Bhel, NTPC and a number of private players.

“We have told the World Bank and the OECD team that they would be allowed to rate the Indian enterprises for their implementation of corporate governance practises only if the world bodies would take the parameters set by the Government of India for the rating purpose,” a ministry of heavy industries and public enterprises official said.

The protective step has been taken by the government despite the fact that stock market regulator SEBI has made it mandatory for all the listed companies to have 50% of the board members as independent directors with an aim to ensure effective corporate governance practises. The government, however, has mandated that all the central public sector enterprises (CPSEs) should fill at least 33% of their board seats with Independent directors.

Industry observers feel the governments move is aimed towards saving the face of India’s top-notch companies like IOC, ONGC and Gail among others that are short on many parameters of corporate governance –– not on those set by SEBI or the World Bank but even on those set by the department of public enterprises (DPE).

The government has, however, started taking the matter seriously and even pointed out that the navratna and mini-ratna status of the CPSEs can be taken away if they do not adhere to the set norms. This would result in the companies losing lots of financial and administrative powers and more government interference in their decision making.

It is also set to make the prescribed norms for corporate governance mandatory for all the CPSEs from next fiscal. SEBI has recently found over half a dozen listed CPSEs (out of the total 41) violating the corporate governance norms. The situation for the private sector and the unlisted companies are much worse.

WB Annual Plan Size Pegged At Rs 11,602cr

New Delhi: The annual Plan of West Bengal for 2008-09 has been estimated at Rs 11,602.38 crore, inclusive of additional Central Assistance of Rs 150 crore for projects of particular interest to the State. This was accorded upon at a meeting between the Deputy Chairman, Planning Commission, Mr Montek Singh Ahluwalia, and the Chief Minister of West Bengal, Mr Buddhadeb Bhattacharjee, here. In his initial remarks, Mr Ahluwalia appreciated the State for improvements in its fiscal health, stating that both growth rate and inclusiveness of development programmes are showing healthy trend. Attention was also drawn to the need for improved States support in implementing national horticulture mission and skill development mission. Proper market mechanisms need to be put in place to decrease wastage in perishable goods. States should come forward in supplementing Centre''s effort in skills development.