Govt to consider market borrowing to fund urban renewal schemes

The central government plans to mobilise funds from the market to finance its mega urban schemes including Housing for All and Smart City, Housing and Urban Affairs Minister Hardeep Singh Puri said today.

The Modi government has committed central assistance to the tune of around Rs 3 lakh crore under various new urban missions, a senior ministry official said.

The government would contribute Rs 48,000 crore for Smart City Mission, Rs 50,000 crore for Atal Mission for Rejuvenation and Urban Transformation (AMRUT), and Rs 14,650 crore for Swachh Bharat Mission (Urban) by 2019-20.

Besides, around Rs 1.80 lakh crore would be required as central assistance for the Pradhan Mantri Awas Yojana-Urban (PMAY-U) by 2022, considering the projection of over one crore affordable houses to be built in the next five years.

The government seeks to ensure housing for all urban poor by 2022 under PMAY(U).

"If you have unlimited resourcese...How we plan to go about it! Well, we are at an advance stage of considering market borrowing to finance some of the mega urban schemes," Puri said at an event here, in his first public address on urban schemes after taking over as the minister.

"Of course, we have to be careful on how that has to be done (market borrowing) but I am happy to inform you that this is at an advance stage of consideration," he added.

Puri, however, did not specify the amount the government was looking to mobilise from the market.

"Once the utilisation of funds which are coming from the Centre as planned is over, then there is need for additional incentives to go beyond...We require a huge amount of money as against the present trend of budgetary allocation. Money is available in the market," he said.

Amid concerns that the results of Smart City Mission are not seen much on the grounds, Puri said, "I would like to assure all of you that tangible gains on the grounds will be seen in the next few months."

Under AMRUT, he said 1.39 core urban households will be provided with water connections and sewarage networks will be improved from the present 30 per cent to 60 per cent, besides developing 1,900 open spaces and green parks.

Underlining that 340 cities, out of 500 selected for AMRUT, have got the credit ratings to enable them issue municipal bonds to mobile resources, Puri said.

Pune has already mobilised Rs 200 crore through the bonds and "a few more cities are set to do so", he added.