The Hindu Business Line : Crisil reaffirms stable rating for MCH bonds

"The reaffirmation indicates high safety in regard to timely payment of the interest and principal obligations on the rated bonds," Ms Chitra Ramachandran, Commissioner of MCH, said, quoting the Crisil report.

Addressing a news conference here on Thursday, she said the rating agency expected the corporation to maintain its high revenue surplus and low debt levels.

"Despite administrative responsibilities related to conduct of elections during the current financial year, the corporation has been able to sustain its financial buoyancy. Crisil expects the MCH to maintain its sound fiscal performance in the medium term, as its revenue income should grow at a healthy rate.

So, its debt levels are not likely to increase in the medium term," she said, quoting Crisil.

However, the rating agency found MCH rely heavily on State Government transfers in the form of share taxes and grants.

"Moreover, its existing high liquidity level may decline due to the large capital expenditure envisaged in the medium term," Crisil said.

It also found that the corporation lacked octroi-levying powers.

On MCH's financial performance for the current year, she said the corporation reported revenues to the tune of Rs 399.11 crore in 2003-04 as against Rs 378.72 crore in the previous year, showing a growth of 5.38 per cent.

The corporation could record good growth in three important sectors - transfer of immovable property, trade licence and advertisement fee.

However, there was a negative trend in profession tax, entertainment tax and revenue grants.

Profession tax collections fell by Rs 7.44 crore from Rs 42.52 crore in 2002-03 to Rs 35.08 crore, showing a decline of 17.50 per cent. Entertainment tax collections dipped by Rs 2.38 crore to Rs 14.59 crore from Rs 16.98 crore last year.

She said the corporation would come out with a policy on hoardings.

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