Calcutta, Jan. 17: Little in Calcutta can be claimed to be 'A' class. Asim Dasgupta take note ' Subrata Mukherjee's civic body is one of them. In fact, A+.
Credit Rating Information Services India Ltd (Crisil), which assesses credit-worthiness, has given the Calcutta Municipal Corporation the A+ rating that no other civic body in the country possesses.
'If the CMC were a company with its shares listed on stock exchanges, the A+ rating, I feel tempted to say, would have boosted the price of the scrip,' said P. Ramesh, Mumbai-based head of Crisil's infrastructure rating. Under the criteria set by Crisil, the CMC ranked 4 on a 0'14 scale where a higher denomination denotes lesser credit-worthiness.
'Our success proves that the CMC's traditional sickness was man-made,' mayor Mukherjee said in a dig at the ruling communists who ran the civic body for two decades.
The former civic administration under the Left Front had approached Crisil in 1998 for a rating before issuing bonds in the market to raise funds, but failed to evoke a response. In 2001, the CMC received a rating of AA+ under the structural obligation category, where government grants are included.
Crisil's current A+ rating is based solely on the civic body's internal finances, excluding government grants.
'We are going to tell the people about this,' Mukherjee added, making it clear that his party, the Trinamul Congress, would go into the civic elections slated for June with this achievement on its lips. Central to the A+ rating are the CMC's revenue receipts for 2003-04 pegged at Rs 468 crore (minus grants), up from Rs 342 crore in 2002-03 and Rs 259 crore in 2001-02, reflecting a steady rise.
Buddhadeb Bhattacharjee's man in the treasury, Dasgupta, could not be reached for comment, but the CMC's books will shine even brighter when placed next to the shambolic condition of state finances.
Municipal affairs minister Ashok Bhattacharya, however, rubbished the 'great achievement', saying that CMC finances appeared better because the government had allowed two rounds of property tax amnesty where dues were waived in lieu of a one-time payment.
'They (CMC) are the only civic body in India today whose financial strengths are well defined and in the public domain,' said Ramesh.
Spread over nearly eight months, Crisil's exercise came to an end last month. Some 20 civic bodies had sought Crisil rating in the open-rating category where the assessment takes into account only the organisation's capacity to generate internal resources, precluding grants from the government and its agencies, and expenditure. But only the CMC was awarded A+. This means if the CMC were to now raise money, the lender would treat it as more than an adequately safe borrower.
Guess what, watching the CMC pull it off, the BrihanMumbai Municipal Corporation has started discussions for a rating in the open category, Ramesh said.
'We have achieved all this not by taxing people, but by improving the collection system and with innovative ideas,' said Mukherjee.
Much of the growth has come from property tax, which grew from Rs 148 crore to Rs 233 crore in the three years. Fees from sanction of construction proposals and drainage and water services also saw a substantial rise from Rs 57 crore to Rs 143 crore.
'Non-tax revenues rose on the back of an unprecedented construction boom in Calcutta,' said the Crisil report. 'A single project, South City, alone contributed Rs 21 crore to the CMC's coffers.'
However, the growth in receipts from tax and non-tax revenues was offset, as the Crisil study points out, by a ballooning wage bill, which is primarily responsible for the high expenditure of Rs 415 crore, Rs 396 crore and Rs 382 crore in the three years.
'This is an area of major concern,' Ramesh said. 'But they should be able to slash the wage bill considerably in the next three years when a large number of people are expected to retire. Remember, the CMC is like a public sector undertaking, with no or very little space for manoeuvring, operating under several constraints.'
While the CMC spends about 75 per cent of its total revenue expenditure on the wage bill, the figure for other Crisil-rated civic bodies in Delhi, Nasik, Thane and Ahmedabad ranges between 40 and 50 per cent.
The Crisil report mentioned the CMC's Rs 63-crore debt to the state government as the lowest among such corporations. Mukherjee said a major portion of the debt dated back to 15 years or more.