FITCH has given an ‘AA+/Stable’ rating to Navi Mumbai Municipal Corporation (NMMC) for its financial performance during 2019-20, which can prove beneficial if it seeks investment from the private sector. NMMC is the first civic body in the country to have achieved AA+ rating sixth consecutive years.
Innovative tax collection, transparency and planned expenditure are key factors that helped the civic body to maintain its ratings.
During 2019-20, the NMMC generated adequate revenues from its own sources to fund revenue expenditure. The property, water, and other tax collections were the key drivers of revenues from tax collections during the period. However, after the Local body tax was abolished and the goods and services tax came into existence, the revenue loss has been mitigated from the timely compensation received from the state government.
Civic chief Abhijit Bangar said that as per the “Ease of Livability Index” Navi Mumbai is the second-best city in the country and this has happened because of quality services. “Striking a balance between quality services and maintaining reserves are key factors for getting good financial ratings,” said Bangar.
The financial condition strengthened due to efficient tax collection despite the impact of COVID 19 in the last financial year. The civic body had launched Abhay Yojana in December 2019 and offered a rebate on property tax default. The scheme worked out and the civic body brought more money in its coffer even after giving waiver on interest.
NMMC’s Chief Accounts and Finance Officer Dhanraj Garad along with his team paid close attention to the financial planning of the corporation. “Good performance in tax collection and planned expenditure were stressed. Payments are made through the innovative 'Host to Host' system by the Accounts Department and any payment of the Corporation is credited directly to the bank account of the supplier,” said a senior official from the Accounts department. He added that that transparency in the work, paperless and speedy administration are other factors for getting good financial rating consistently.
As per the rating agency, NMMC generates adequate revenue surplus to fund infrastructure projects in the city. Since Navi Mumbai is a planned city, it does not require periodic capital expenditure plans for infrastructure development projects. However, the civic has managed to accumulate healthy cash balances over the years on account of a healthy revenue surplus, supported by moderate spending on infrastructure projects.