Fitch rates local bodies

According to global rating agency, Fitch Ratings, Pune Municipal Corporation has stable financial credentials that make the civic body attractive for long-term investments. In its latest performance review of the civic body, Fitch has assigned AA - rating to PMC. This is for the third consecutive year that PMC has been assigned AA - rating. PMC officials are quite happy to hear about the latest rating, and they said that it will be helpful for attracting investment for new projects. The Fitch website indicates that the Fitch Ratings has “affirmed PMC’s national longterm rating at AA - . The outlook remains stable.” The latest rating reflects PMC’s moderately strong financial performance over the financial year 2008-09, notwithstanding a five-per cent dip in octroi collection due to economic slowdown, Fitch reported. Fitch noted that the PMC’s financial health will not be affected even if octroi is abolished, provided alternative revenue-generating streams make good the octroi loss. It reported, “Government of Maharashtra (GoM) has proposed to replace octroi with local body tax in 15 D-class municipal corporations, though PMC is not covered under this proposal. If octroi is replaced by some other form of taxation, the actual realisation from the alternative tax will be key to the PMC’s financial performance given its strong dependence on octroi.” The rating agency predicted that even a higher outgo in the form of salaries for employees won’t affect PMC’s coffers. Fitch said, “PMC has partially revised salaries of its employees in line with recommendations of the sixth central pay commission in 2009, and plans staggered full implementation over 2010-12. However, based on PMC’s current debt and investment position, Fitch expects that a full pay revision will not have much impact on its financial profile. As per the financial analysis done by the renowned agency, PMC’s debt position too remained comfortable.
RATINGS OF OTHER CIVIC BODIES
1) Mira-Bhayandar Municipal Corporation (MBMC):A -
2) Thane Municipal Corporation (TMC):AA -
3) Kalyan-Dombivilli Corporation (KDMC):A
4) Municipal Corporation of Jabalpur (MCJ): BB +
5) Indore Municipal Corporation (IMC): BBB