Maharashtra demands for Mumbai package

Maharashtra government has asked the Centre to make provision in budget for Mumbai in the Union budget for the year 2005-06.

“The state government is committed to make the metropolis a world class city and the Union government should make budgetary provision of ‘Mumbai Package’ in the budget to boost the process,� Chief Minister Vilasrao Deshmukh said at a meeting on Mumbai here last night, attended by Union Minister of State for PMO, Prithviraj Chavan.

Maharashtra is planning to bring Mumbai city into a global business arena. They got the big boost when World Bank is willing to finance Mumbai projects with the loan of $1billion loan.The World Bank is also willing to provide a counter guarantee to back the state’s market borrowing programme for these projects.

A senior government official told Business Standard, “We had extensive talks last night with Union minister of state in the PMO, Prithviraj Chauhan, on the proposed recast plan for financing various Mumbai-specific initiatives. We were told by Ashish Singh, secretary to Chauhan, that the proposal to the World Bank, forwarded by Maharashtra to the Centre, would be despatched in a couple of days.”

“This will mean that Maharashtra, which has seen it’s credit rating downgraded repeatedly in the past by rating agencies, would find its rating on a par with top corporate houses at AAA+ as its borrowings would be backed by the World Bank,” the official said.

Sources said that the state chief minister had sent a letter to the finance minister on June 23, 2003 and also on May 26, 2004. “The government has also appealed to the members of Parliament from Maharashtra to take up the issue with the Central government during the ongoing winter session,� sources said.

International agencies like the World Bank are committed to providing funds, their rules require investment commitments from the central and state governments.The central government has now asked Maharashtra to draw up a list of projects and their timeframe to be taken up on a priority basis, Chavan told reporters here.

The state government is also mulling over handing over some of the projects to the private sector.