Minister Himanta Biswa Sarma said.
The state government had submitted a proposal of
Rs 2,400 crore for implementing Smart City project
in Assam capital. However, the city is facing a tough
time in arranging rest of the funds and that is creating
problems for implementing many projects. Other
smaller cities face similar challenges.
The external borrowings agencies are not as attrac-
tive as it appears to be. In many situations PPP infra-
structure projects have not been able to come off the
ground and attain financial closure because they have
not been deemed bankable. Infrastructure lending is
the biggest challenge for the banks, as put by the RBI.
In this context, raising money through PPP man not
be the cake walk for cities.
Despite these varying levels of municipal finances,
the central government continues to emphasize the
importance of enabling local bodies to raise capital
from the market more directly. The ability to do so,
however, is possible only if and when the local bodies
are financially well off enough to generate returns
and meet their obligations to creditors. Also most of
the cities have poor financial health resulting in poor
rating and thus it becomes very difficult to raise
money from the Municipal Bond market as per the
recent guidelines issued by the SEBI.
The Urban development ministry had proposed
various user charges and increased taxes to raise
funds, however the state government and the Urban
Local bodies are still shying away from imposing the
additional levy fearing protests from the citizens.
The bottom up approach is the ideal model that is
used by most of the global smart cities, however with
most cities and municipal bodies reeling under a
funds crunch, generating additional funds are ap-
pearing to be a challenging task for the government.
Public Private Partnerships or PPP arrangements- which is still believed to the second largest source of
funds after Government grants in the fiscal plans for
smart cities. While the private sector has evinced in-
terest in smart cities, there are several concerns about
the public private partnership model. One of the con-
FUND REQUIREMENT FOR
URBAN DEVELOPMENT