All 72 urban local bodies (ULB) in Telangana would go for independent credit rating assessment through noted credit rating firms to assess their financial status, administrative initiatives, and funds for long-term planning.
A dozen prominent firms have been short-listed, and the exercise would begin soon. Some of the rating agencies which are in the race include ICRA, Crisil, and Fitch, and each of the agencies could be allotted five ULBs each.
The process of coming up with credit ratings for each ULB would be completed within the current financial year. The urban local bodies would be assessed on their financial performance, economic growth prospect, capital utilisation, infrastructure, and dependence on the State government, among others, said Commissioner and Director of Municipal Administration (CDMA) T.K. Sreedevi.
“We want the ULBs to raise their own funds independently and take up vital civic infrastructure work in their respective areas by raising municipal bonds. It will also inculcate financial responsibility,” she said.
Incidentally, the Securities and Exchange Board of India (SEBI) had recently changed certain provisions in the regulations allowing municipalities having a surplus in their books in any of the preceding three financial years to issue municipal bonds. The ULB should also not have defaulted on its loans from any financial institution in the last one year.