Centre to recommend loans to performing cities: Venkaiah Naidu

Agencies such as World Bank, ADB and JICA would come forward to lend only if the urban bodies have the ability to pay back, says the Urban Development Minister

Venkaiah Naidu

HYDERABAD, September 7: The Centre would recommend loans from international agencies for reform-oriented and performing cities who have repaying capacity, Union Urban Development Minister M Venkaiah Naidu said today. He said agencies such as World Bank, ADB and JICA would come forward to lend only if the urban bodies have the ability to pay back. "Otherwise, by simply asking, nobody is going to give loan. And then, state government has to give guarantee. If the state is not going to give, then we will give. And then, the Central government has to give guarantee at the national level for international agencies," the Minister said. Naidu was speaking here at a regional workshop on smart cities for 11 states. "So, we are going to recommend for loan for those cities which are ready to reform, and have creditworthiness," he said. Appreciating the practice of rating creditworthiness among city corporations in Maharashtra, Naidu suggested more such urban bodies in the country to embrace the model. "That's a good example. Every city must go for that creditworthiness," he said. The minister said urban municipal bodies in the country are in a bad shape, with some not even in a position to pay the salaries of their staff. "Today, our situation in urban areas is very bad. Taxes have not been revised in some municipalities for five years, six years or seven years. In some municipalities, the revenue is less and the salary of employees is high. "Are the employees appointed in municipalities (only) to give (them) salaries? How much money you have, so much you can spend. Some people are saying, '(for) four months we don't have salaries, sir. Give something from Delhi'. (If) I have to give salaries to your municipal town, then what are you going to do? The ratio has also to be kept in mind," he asserted. Noting that there is disappointment in some cities for not figuring in the list of 100 smart cities announced by the Centre, he exhorted the cities to reform, so as to qualify. "There is some disappointment in some cities that they have not been selected. But this is only the beginning. The selection is not automatic. 20 cities will be selected from 100 cities again. Only pre-qualification is over. "It's like 100-m race, 200-m race, 400-m race... You pass one and then you go to the next one. That's why I said the countdown begins now. All the cities, they must be extra careful," he said, adding if you don't reform, you will not be there for the next round. "A smart city plan is what the citizens want for themselves in their city. The broad contours of a smart city, in our context as we have visualised, are necessary core infrastructure, sanitation, health and education facilities, clean and sustainable environment, good public transport, good city governance and adoption of smart technologies to ensure decent living and catalyse economic growth, which is the need of the hour," the minister further said. The workshop was attended by officials from states and union territories including Andhra Pradesh, Telangana, Karnataka, Tamil Nadu, Kerala, Maharashtra, Goa, Andaman and Nicobar Islands, Dadra and Nagar Haveli, Daman and Diu, Lakshadweep Islands and Puducherry. "The convergence of new initiatives like Smart Cities Mission, Atal Mission for Rejuvenation and Urban Transformation (AMRUT), Swacch Bharat Mission, Urban Housing Mission and Heritage City Development and Augmentation Yojana (HRIDAY) is another important feature of the shift in the government's approach to urban development to make it more result-oriented and inclusive," Naidu said. "The Centre has substantially enhanced the resource base of states by effecting transfer of 42 percent of divisible revenues over the next five years, as against 32 percent during the last five years. "Further, a huge sum of Rs 87,143 cr would be made available to urban local bodies as against only Rs 23,111 cr during the last five years," he added. The Centre has committed itself to support states and urban local bodies with central assistance of over Rs 3 lakh crore for the next five to six years, he said. Prime Minister Narendra Modi is keen on transforming India in every sense, he said, adding the smart city concept is a part of the endeavour. Naidu also highlighted the 25 'smart initiatives' which are a part of smart city planning.