2011年-世界发展银行全球_Developing_a_Regulatory_Framework_for_Municipal_Borrowing_in_India_50页_2mb

报告摘要

Summary of "Developing a Regulatory Framework for Municipal Borrowing in India"

Core Content

This report, prepared by the World Bank in September 2011, examines the current regulatory environment for municipal borrowing in India and proposes a framework to enhance the efficiency and sustainability of municipal debt markets. The study was conducted at the request of the Ministry of Urban Development (MoUD) and the Department of Economic Affairs (DEA), with a focus on regulatory and legal conditions that currently hinder municipal borrowing. The report outlines the need for expanding municipal access to credit finance and suggests both immediate and long-term reforms to address this challenge.

Main Objectives

To analyze the current state of municipal borrowing in India.
To assess the regulatory and legal constraints that affect municipal debt.
To propose a regulatory framework that could facilitate sustainable municipal borrowing.
To highlight the role of state-level regulation in shaping the municipal debt environment.

Key Findings

Municipal Borrowing in India

Municipal borrowing in India is currently low despite high capital investment needs.
In the 2007-2008 budget year, ULBs spent approximately Rs 180 billion on capital expenditures, but only Rs 5 billion was sourced through borrowing, representing 3% of total spending.
The estimated annual borrowing by ULBs during 2002-2008 was around Rs 4-5 billion, which is nearly equal to the negative net funds balance of all ULBs in that period.
The Report on Indian Urban Infrastructure and Services estimates an investment requirement of Rs 39,200 billion (about US$ 870 billion) over the next 20 years.
A McKinsey study estimates an investment need of US$ 1.2 trillion in Indian urbanization, indicating that municipal borrowing must expand significantly to meet these needs.

JNNURM and Borrowing Needs

JNNURM, the Government of India's (GoI) flagship urban development program, has an estimated total capital expenditure of Rs 1,292.79 billion for 2007-2012.
The program is expected to require ULBs to provide matching funds, with an estimated need of Rs 200 billion over the period.
The WSS study estimates that 23 JNNURM cities would need to borrow Rs 140-190 billion, with only 25 out of 240 Detailed Project Reports (DPRs) indicating any borrowing.

Factors Affecting Municipal Borrowing

Intergovernmental fiscal framework: Shared and assigned taxes, fiscal transfers, and expenditure assignments directly impact the ability of ULBs to generate operational surpluses for debt service.
Municipal creditworthiness: Depends on financial management systems, availability of reliable financial data, human resources, and political stability.
Domestic debt market: The availability of capital for municipal projects is influenced by the broader financial market, including the preferences of Scheduled Commercial Banks (SCBs) and the existence of public and quasi-public lending institutions.
Regulatory framework: The most critical factor for reform, encompassing ex ante rules, investor regulations, debt monitoring, and procedures for handling defaults.

Regulatory Environment

International Context

The report references international models for municipal borrowing regulation, including those from the USA, Poland, South Africa, and Hungary, highlighting the potential for developing a similar framework in India.

Indian Regulatory Structure

The Indian regulatory environment is shaped by the Constitution, state-level regulations, and central-level policies.
The Central Vigilance Commission (CVC) and the Reserve Bank of India (RBI) play significant roles in oversight and regulation.
The Debt Resolution Tribunal (DRT Act) and the Municipal Debt Tribunal (MDT) are mechanisms for resolving debt issues, though their effectiveness is not fully established.

Policy Recommendations

Central Regulation of Lenders

RBI Master Circular on Loans and Advances: Should be updated to include clearer guidelines for lending to ULBs.
Tax Treatment of Municipal Bonds: Needs to be reviewed to enhance their attractiveness to investors.
SEBI Bond Listing Requirements: Should be adjusted to facilitate easier access to capital markets.
Insurance and Provident Fund Regulations: Need to be aligned with municipal borrowing practices.
CVC Oversight: Should be strengthened to ensure transparency and accountability in municipal financial dealings.

State Regulation of Borrowers

Ex Ante Rules

Definition of Debt: Clear and consistent definitions are essential to standardize borrowing practices.
Purpose of Borrowing: Borrowing should be restricted to specific infrastructure projects.
Borrowing Approval: Requires a formal process of approval, ensuring transparency and accountability.
Limits on Long Term Borrowing: Should be set based on financial capacity and project requirements.
Security and Collateral: Need to be standardized and transparent.
Guarantees: Should be regulated to prevent over-guaranteeing and ensure fiscal responsibility.
Loan Tenor Limits: Should be aligned with project timelines to ensure efficient use of funds.
Monitoring, Reporting and Database: A centralized database is necessary for tracking municipal borrowing and financial performance.

Ex Post Procedures

Short to Medium Term Recommendations: Include enhancing transparency, improving financial management, and aligning regulatory frameworks with international standards.
Long Term Recommendations: Focus on developing a robust municipal debt market, improving creditworthiness, and creating a sustainable regulatory environment.

Phasing in Reforms

Reforms should be introduced gradually to avoid disrupting existing financial systems.
The report emphasizes the need for a coordinated approach between state and central governments to ensure the effectiveness of the proposed regulatory framework.

Impact on Municipal Lending

A well-regulated municipal debt market could significantly increase access to credit finance.
It could also improve the efficiency of capital allocation and reduce reliance on grants and transfers.
The report stresses the importance of municipal tax base in meeting long-term investment needs.

Key Entities and Abbreviations

SPV: Special Purpose Vehicle
TNUDF: Tamil Nadu Urban Development Fund
ULB: Urban Local Bodies
EMMA: Electronic Municipal Market Access
PMDO: Pooled Municipal Debt Obligation
HUDCO: Housing & Urban Development Corporation Ltd.
IDFC: Infrastructure Development Finance Company Limited
IIFC: India Infrastructure Finance Company Ltd.
IL & FS: Infrastructure Leasing & Financial Services Limited
JNNURM: Jawaharlal Nehru National Urban Renewal Mission
RBI: Reserve Bank of India
SEBI: Securities and Exchange Board of India
SARFAESI Act: Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests Act (2002)
SCB: Scheduled Commercial Bank
CVC: Central Vigilance Commission
DEA: Department of Economic Affairs
PFRDA: Pension Fund Regulator
LIC: Life Insurance Corporation of India

Conclusion

The report underscores the need for a comprehensive regulatory framework to support municipal borrowing in India. It highlights the current limitations in the municipal debt market and suggests a range of reforms at both state and central levels. The goal is to create a more transparent, efficient, and sustainable municipal borrowing environment that can meet the growing infrastructure needs of Indian cities.

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