Tamil Nadu   

Department of Municipal Administration to set up debt management cell soon

Special Correspondent

It will help to create database of municipal finances

TIRUCHI: The Department of Municipal Administration would soon set up a Debt Management Cell for urban local bodies to create a database of municipal finances and to assist local bodies in decision making. The cell, to function at the office of the Commissioner of Municipal Administration, would create and maintain a database of financial data from five Corporations and 152 municipalities in the State. The Department has already called for expression of interest from consultants and proposals are to be evaluated soon, a senior Department official told The Hindu.

One of the objectives of the initiative would be to explore innovative resource mobilisation opportunities to fund urban civic amenities and assess the marketability of the local bodies.

With the bodies faced with infrastructure problems, there was a need felt for identifying innovative and sustainable mechanisms to meet their financial requirements. It would provide a systematic framework to analyse the data for various agencies, including the government and the Finance Commission.

Presently, there was no proper method of transfer of information from individual local bodies.

There was also limited information on the debt repayment capability of the local bodies. This resulted in the urban local bodies skipping their debt obligations, the official said.

The cell would design a set of key debt-related indicators that would help the CMA grant approvals to the local bodies on new capital investment projects and their borrowings.

Capacity building, through training officials in debt management, would be another focus area.

The initiative would bring about a consistent state-wide policy so that local bodies achieved maximum resource mobilisation.

A range of financial products would be marketed to the local bodies to help them make informed choices.

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