Vellakovil City Development Plan - Municipal
Vellakovil City Development Plan - Municipal
Vellakovil City Development Plan - Municipal
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<strong>City</strong> <strong>Development</strong> <strong>Plan</strong> for Vellakoil <strong>Municipal</strong>ity SMEC India Pvt Ltd<br />
Final Report TNUDP III<br />
Table8.25 Summary of Borrowing and Investment Capacity – Scenario III<br />
Borrowing Capacity Rs. 937.48 lacs<br />
Investment Capacity (BC/0.14) Rs. 5208.24 lacs<br />
Investment Requirement Rs. 9018.12 lacs<br />
Sustainable Investment Capacity % - IC / IR 57.75%<br />
Thus the sustainable investment capacity works out to 58% of the total investment requirement at<br />
Rs. 5210 lacs in case the growth in Devolution Funds is taken @ 10% p.a.<br />
8.9 KEY INDICATORS<br />
The key Indictors of the <strong>Municipal</strong>ity based on the financial projections of Scenario II (Growth Rate<br />
of Devolution Funds @ 7.5% p.a.) works out as below :<br />
Table 8.26 Key Indicators<br />
Minimum Maximum Average<br />
Existing (2001-02 to 2006-07)<br />
Operating Ratio 0.71 1.01 0.85<br />
Debt Service Ratio 0% 6% 2%<br />
Category<br />
Short Term (2009-10 to 2013-14)<br />
1<br />
Operating Ratio 0.92 1.33 1.07<br />
Debt Service Ratio 28% 49% 34%<br />
Category<br />
Long Term (2009-10 to 2028-29)<br />
3<br />
Operating Ratio 0.70 1.33 0.84<br />
Debt Service Ratio 6% 49% 22%<br />
Category 1<br />
Note : 1 – Financially Sound; 2 – Financially Fragile; 3 – Financially Insolvent<br />
The financials and the ratios of the <strong>Municipal</strong>ity are not good in the short term due to high operating<br />
ratio and debt service ratio. But in the long run, the same have improved and is good due to higher<br />
number of commercial and industrial assessments.<br />
8.10 INFERENCE<br />
The investment capacity of Vellakoil <strong>Municipal</strong>ity on ‘As is Where Basis’ works out to Rs. 1493<br />
lacs.<br />
The investment capacity of Vellakoil <strong>Municipal</strong>ity works to 46% in case of Scenario II (Growth<br />
Rate of Devolution Funds assumed @ 7.5% p.a.) and 58% in case of Scenario III (Growth Rate<br />
of Devolution Funds assumed @ 10% p.a.).<br />
In value terms the investment capacity works out to Rs. 4135 lacs under Scenario II and Rs.<br />
5210 lacs under Scenario III.<br />
It may be observed that the investment capacity has improved with the introduction of new<br />
projects as compared to ‘As is Where Basis’ scenario. The same is on account of the fact that<br />
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