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Centre allows Rs 9,913 crore additional borrowing by 5 states

Centre allows Rs 9,913 crore additional borrowing by 5 states
NEW DELHI, SEP 24 (IANS) | Publish Date: 9/24/2020 12:25:09 PM IST

The Department of Expenditure, under the Finance Ministry, has granted five states permission to raise additional financial resources of Rs 9,913 crore through open market borrowings.

The states are Andhra Pradesh, Telangana, Goa, Karnataka and Tripura.

“This permission has been accorded after these states successfully met the reform condition of implementation of One Nation One Ration Card System,” an official statement said.

The additional borrowing grants permitted for Andhra Pradesh, Telangana, Karnataka, Goa, and Tripura are Rs 2,525 crore, Rs 2,508 crore, Rs 4,509 crore, Rs 223 crore and Rs 148 crore, respectively.

In view of the unprecedented Covid-19 pandemic, the Central government had, in May, allowed an additional borrowing limit of up to 2% of Gross State Domestic Product (GSDP) to the states for the year 2020-21. This made an amount up to Rs 4,27,302 crore available to the states.

One per cent of this is subject to implementation of four specific State level reforms, where weightage of each reform is 0.25% of GSDP -- implementation of One Nation One Ration Card System, ease of doing business reform, urban local body/ utility reforms and power sector reforms.

The remaining additional borrowing limit of one per cent was to be released in two instalments of 0.50% each, first immediately to all the states as untied, and the second on undertaking at least three out of the four mentioned reforms.

The Centre has already granted permission to states to raise the first 0.50 per cent as open market borrowings in June. This made an additional amount of Rs 1,06,830 crore available to the states.

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