AMC may get Rs 26 cr incentive for issuing municipal bonds

As announced earlier by civic chief Mukesh Kumar, Ahmedabad Municipal Corporation is set to issue bonds. However, there is a revision. The bonds will be taxable municipal bonds and not green bonds. And, if things work as per plan, AMC may get Rs26 crore from the central government.

“The central government has announced incentive scheme for the first ten Urban Local Bodies who will issue taxable municipal bonds under AMRUT scheme. We’ll issue the bonds as soon as possible and authority is given to municipal commissioner to proceed for raising money,” said Pravin Patel, standing committee chairman on Wednesday.

No Green Bonds: There will be no Green Bonds, but Municipal Bonds. AMC will raise money from market by issuing taxable bonds as per the guideline of SEBI set in 2009-10, which was revised in 2015. As per that no ULBs are permitted to issue tax-free bond.

“We wanted tax free bonds but after 2009-10, it is not possible. But center after our constant approach has announced incentive scheme. If we will issue bonds worth Rs200 crore then we will get Rs26 crore as an incentive from the central government,” said senior account official, AMC. Pune civic body, who has raised money via taxable bonds for 2017-18, will get an incentive for the last year from the centre.

BRIGHT HISTORY

AMC was the first municipal corporation in Asia to issue the tax-free bond in 1998 for Rs100 crore. Thereafter, three times the civic body had issued the bonds in 2000,2002 and 2004. AMC has AA stable rating.