Commit 1% share of GST to local bodies: Experts in Pune

PUNE: Urban local bodies need to be better equipped and supported by the government as well as through public-private partnerships and market instruments like bonds to attract more capital for large-scale and climate-resilient projects said policymakers and finance experts at an event on Friday to discuss the dynamics and finances of developing urban infrastructure in Pune, as part of the G20 events in India.
The event was organised by the Mahratta Chamber of Commerce, Industries, and Agriculture, Pune International Centre, and other stakeholders. The city’s civic commissioner Vikram Kumar, additional secretary of the Union Ministry of Housing and Urban Affairs Surendra Bagde as well as representatives of the World Bank Group, the State Bank of India were present.
Neeraj Gupta, principal investment officer of the World Bank Group’s International Finance Corporation noted that only around 27 cities have creditworthiness and the finance to borrow to the tune of USD 1 billion each, and only 20% of all PPP projects in India have been executed in urban areas, with around 7% of such investments.
A number of panelists spoke about the need to make urban local bodies more autonomous and financially solvent. “Urban local bodies are generally small in India, and not of the size they should be because they don’t have many revenue handles, especially with the implementation of the GST, rationalisation of user charges, and abolition of octroi. The state and Union governments must commit to share 1% of GST revenue with urban local bodies, to help themclean up their balance sheets and attract partnerships,” said Abhay Pethe, a senior fellow at the Pune International Centre.