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Last Updated : Jul 15, 2019 09:11 PM IST | Source: PTI

UP govt to raise funds for Lucknow, Ghaziabad MCs through municipal bonds

The UP government will try to raise Rs 200 crore for the Lucknow Municipal Corporation and Rs 150 crore for the Ghaziabad Municipal Corporation through the move from the market.


In a bid to make funds available to the Lucknow and Ghaziabad civic bodies, the Uttar Pradesh government July 15 gave its nod to float municipal bonds. The decision was taken at a meeting of the state Cabinet, chaired by Chief Minister Yogi Adityanath.

The UP government will try to raise Rs 200 crore for the Lucknow Municipal Corporation and Rs 150 crore for the Ghaziabad Municipal Corporation through the move from the market.

The money raised through the bonds by the Lucknow civic body will be used for improving the drinking water supply and the sewage system.

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Principal Secretary (Urban Development) Manoj Kumar Singh told reporters that this was for the first time that municipal bonds were being floated in the state.

The money raised by the Ghaziabad MC will be used for the tertiary treatment of water for industrial usage.

Singh said this was a market-oriented experiment and an attempt to make the working of the MCs more professional.

The bonds will be for a duration of 10 years and the rate of interest on these will be from 8.5 per cent to 9 per cent.

A team would be constituted to monitor the implementation of projects launched with the money raised through the municipal bonds, he said, adding that the permission from the Securities and Exchange Board of India (SEBI) had been obtained in this regard.

A presentation was also given to the Bombay Stock Exchange in this regard.

The Principal Secretary said there would be no government guarantee for the bonds and the probability of institutional investors turning up for it was more.

"The aim behind it is to make the municipal corporations economically self-reliant," UP Cabinet minister Shrikant Sharma said.

The state Cabinet also approved an amendment to the municipal corporation property tax rule to remove anomalies in the classification of properties.

"Today's amendment puts a mall and a small shop in different categories for the purpose of property tax evaluation," Singh said.

"If a shop measuring 120 sq feet is operational in a residential area, it would have to pay 1.5 times the property tax," he said, adding that earlier the shopkeeper had to shell five times the property tax prevailing in that area.

UP officials said the decision would benefit small shopkeepers selling tea, milk, egg and vegetables etc.

Cabinet minister Sharma said the illegal usage of the state government logo had also been made a punishable offence.

"Anyone misusing the state government logo may be sent to the jail for a period of two years besides a fine of Rs 5,000," Sharma said.

Another Cabinet decision pertained to the punishment for the adulteration of liquor, under which a retailer/wholesaler/distiller may now lose his licence for the first offence.

"This will act as a major deterrence. Earlier, a violator was fined Rs 40,000 for the first offence, Rs 50,000 for second and then the cancellation of licence for the third," said a senior official.

He said a case would be registered under Sections 272, 273 and 304 of the IPC in the regard.

"The money generated from the sale of liquor will be recovered under the Gangster Act," the official said, adding that the violator could also be charged under the National Security Act for liquor adulteration.

The property of the violators would also be seized, the official said.

The sale of liquor at the rates above the MRP will also invite higher fine and the cancellation of licence.

Under the amended rules, the first offence will invite a fine of Rs 75,000; the second Rs 1.5 lakh and third offence will lead to the cancellation of licence.

Earlier, the violators paid Rs 10,000 for the first offence, Rs 20,000 for the second and Rs 30,000 for the third.

The UP Cabinet also cleared a proposal for the transfer of 45.489 hectares belonging to the Agriculture Department to the Industrial Development Department in Aligarh for a defence corridor, the UP minister added.

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First Published on Jul 15, 2019 09:10 pm
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