If there is one thing that repeated financial crises, whether national or international, have taught us, it is that financial independence is crucial for the survival of all levels of government. If financial stability does not exist or if it exists, but each level of government is not financially independent, there are few possibilities for the respective government to continue to do its job. The era of financial dependence has long disappeared. While one of the most important income from local governments is land taxes or municipal taxes, there is still another substantial way to generate funds to meet the needs at the base. In the financial world, these instruments are called "Built"the short form for municipal obligations. The idea behind municipal obligations is that they provide funds for local governments for development projects at a lower rate than banks. Essentially, municipal obligations operate very similarly to state obligations (commonly known as treasury bills) in which the municipality uses its good reputation as well as its credibility to search for funds with financial institutions as well as the public (practically zero) of default. Municipal bonds are available in two general types: secure and not guaranteed. The guaranteed bonds are when an asset of a municipality is promised to collect funds. The unmarked Munas are what they seem to be; In other words, they are not guaranteed insofar as no specific assets are promised. However, they have the guarantee of the municipal government, ensuring that payments of interest on the obligation are made and that the capital will ultimately be returned. Karachi is a huge city with exceptional potential. It has become a common political comment in the salons and dinners that Karachi generates the greatest number of income, but it is not spent for the city. I would say that there is more in this calculation which does not respond to the eye. It is enough to say at this stage that Karachi does not have the funds at the municipal level to ensure that its development and the city are not financially independent. A radius of hope that appeared on the horizon is under MUCT (Municipal Utility Charges and Taxes) collection through electrical invoices K. This has led to a monthly turnover of nearly 200 million rupees. During the 10 months of the last financial year, KMC obtained an amount of more than 1.9 billion rupees as opposed to the previous annual collection of only 155 million rupees. It should be remembered that the MUCT is not a new tax and had always existed. However, there has never been a mechanism to correctly collect this tax and make its potential. The Karachi Metropolitan Corporation, thanks to the reflection outside the box and keeping in sight the realities on the ground of the city, has teamed up with a public service company to ensure the recovery of the moult. This has led to a major financial gain for KMC, and the results can be seen every day in the city in the form of its development projects. Although we can question the quantum of development per kmc compared to the gigantic size of our city, however, after a long period of the presence of KMC in terms of development as well as rehabilitation seems to be visible and we hope that the same thing will continue in a fair, transparent and equitable manner. That being said, the money recovered via MUCT is certainly not enough. Even if not, often, money is necessary, while income should arrive in the next 5 to 10 years. This is where the concept of municipal ties can change the situation for the city of Karachi. Essentially, what is proposed is the issue of bonds to investors. Initially, these can be Pakistani investors. However, subject to regulatory approval, foreign investors can also be included. This will help collect funds for the financing of development projects at very low rates, thus guaranteeing the financial viability and independence of the city of Karachi. Municipal obligations are used around the world in cities like New York, London, Ahmedabad and Pune, among other things, to borrow money and finance development projects. The municipal bond market of India, although emerging, has increased 5,000 INR crores which have directly translated into development work. Likewise, New York City has funded metro extensions, schools and bridges through MNI bonds. Municipal obligations have obtained the same feat for all these cities which issued them. The previous one is clear. At the state level, in Pakistan, the government of Pakistan regularly issues obligations to local and foreign investors in order to finance its development and daily needs. Therefore, although it is a new idea from the point of view of a local government in Pakistan, it is certainly not new in the financial world. The only differentiation between municipal obligations and those issued by the State will be the level of government support. They would operate in a similar way. Basically, this structure would allow Karachi to raise capital independently, which allows it to finance critical infrastructure and development projects without depending on federal or provincial documents. The advantages will be of great scale: budgetary autonomy, timely execution of the project, the confidence of the public of karachites and urban renovation. Bringing such a structure to Karachi via KMC does not only concern finance. It is a question of redefining the capacity of the city to shape its own future. Time for daring and systemic solutions is now. Although not the Sayers can question it by arguing that the federal government should contribute or that the Sindh government should finance it since Karachi is the greatest contributor to the national or provincial chessboard, the argument would be futile since and the Sayers must simply say just say "No" And do not take into account their words. As mayor, although with some efforts, I am able to obtain funding from the provincial government, the federal government is completely apathetic to the needs of our city and I do not see this lax attitude. With such a situation that looks directly in the eye, we end up with two options: the first is to constantly fight throughout the term and hope for documents, or second to take the driving seat and improve the own KMC income base. Needless to say, the latter is a more solution -oriented approach. It is my firm conviction that the only way for the city of Karachi progresses and is tied with international municipalities is by financial independence. The concept of municipal obligations as proposed will be a major step in this direction not only for the city of Karachi. But this will also prove to be a reference for all the other major cities in Pakistan and municipalities. Hopefully this time, we will not be stuck in a small policy, but we will rather focus on the situation as a whole. This city belongs to everyone, and I hope that people from all districts will support in this company – so that we, Karachites, can achieve the immense potential of this single metropolis. Let me conclude by drawing the influence of a Chinese proverb that I blame as "The best time to act was yesterday, the second best time is today". It is time that we act. The writer is the 28th mayor of Karachi
Karachi fixing: unlock the blockage
