Four States Allowed to Borrow Additional Rs 5,034 Crore Post Ease of Doing Business Reforms

The Finance Ministry has granted permission to four states of Assam, Haryana, Himachal Pradesh and Punjab to borrow an additional Rs 5,034 crore for undertaking ease of doing business reforms.

In a statement, the ministry said four more states namely, Assam, Haryana, Himachal Pradesh and Punjab have undertaken ‘Ease of Doing Business’ reforms stipulated by the Department of Expenditure, Ministry of Finance.

“Thus, these States have become eligible to mobilise additional financial resources and have been granted permission to raise additional Rs 5,034 crore through Open Market Borrowings,” it said.

With this, 12 states, including Andhra Pradesh, Karnataka, Kerala, Madhya Pradesh, Odisha, Rajasthan, Tamil Nadu and Telangana, have undertaken the stipulated reforms to facilitate ease of doing business. On completion of reforms facilitating ease of doing business, these 12 states have been granted additional borrowing permission of Rs 28,183 crore, the statement added.

In view of the resource required to meet the challenges posed by the COVID-19 pandemic, the Government of India had in May last year enhanced the borrowing limit of the states by 2 per cent of their GSDP. Half of this special dispensation was linked to undertaking citizen-centric reforms by the States. The four citizen-centric areas for reforms identified were implementation of One Nation One Ration Card System, ease of doing business reform, Urban Local body/ utility reforms and power sector reforms.

Till now, 17 states have carried out at least one of the four stipulated reforms and have been granted reform-linked borrowing permissions. Of these, 12 states have implemented the one nation one ration card system, 12 states have done ease of doing business reforms, five states have done local body reforms and 2 States have undertaken power sector reforms. Total reform linked additional borrowing permission issued so far to the states stands at Rs 74,773 crore, the ministry added.

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