CRISIL has assigned its corporate credit rating of 'CCR BB-' to Howrah Municipal Corporation (HMC). The rating exercise has been carried out under a mandate from the Ministry of Urban Development, Government of India, as part of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM).

The rating reflects HMC’s favourable legal and administrative framework and moderate economic base, and the advantages it derives from the proximity of its area of coverage to Kolkata city. The rating also factors in HMC’s inadequate own revenue generation, which, coupled with high establishment expenditure, has led to low financial flexibility and high dependence on the state government. Further, the corporation has a weak financial profile with high deficit levels, low debt capacity, and inadequate financial management. Its service arrangements too are inadequate, leading to low tax payments.

About HMC
HMC, formed in 1980, is governed by the Howrah Municipal Corporation Act, 1980. The corporation, which is the final decision-making body, consists of an elected body of 50 councillors. HMC covers an area of 52 square kilometres and provides a range of civic services to around one million residents. The major service provided by HMC is water supply. In 2006-07 (refers to financial year, April 1 to March 31), HMC generated revenue receipts of Rs.401 million, but incurred a revenue deficit of Rs.134 million.