The Times of India            28.11.2013  

NMC to raise Rs 200-cr loan from banks

NASHIK: The Nashik Municipal Corporation (NMC) has invited tenders from banks to raise a loan of Rs 200 crore to undertake major civic works and those related to the ensuing Kumbh mela in the city.

The NMC has invited tenders from all the nationalised and private banks quoting interest rates they (banks) are going to charge. The civic body will finalise the bank once they get interest rates from the banks.

The state government on October 17 had given its approval to the NMC to raise the loan from banks.

Speaking to TOI, a senior official from the NMC said, "We are planning to complete the loan process at the earliest and raise Rs 200 crore in a month or two so that we can undertake some major civic works. We are already facing a financial crunch and need funds to carry out major developmental works. The Kumbh mela is also around the corner and we are already in the tender process to undertake major infrastructural works that would require 20 to 24 months. But we have still not received any funds from the state government. Hence, the Rs 200-crore loan will help us a lot."

Earlier, the octroi was the major source of income of the municipal corporation and its share was around 61% of the total revenue earned. But under the new tax system, the Local Body Tax (LBT), which was introduced in the NMC limits from May 22, the revenue declined by 19.46% to Rs 269 crore in the first half of the current fiscal, against the revenue of Rs 334 crore through octroi during the corresponding period in the last fiscal 2012-13. This has led to a financial crunch to NMC to some extent.