Finance Ministry allows five states to borrow Rs 9,913 crore on meeting reform targets

New Delhi: The Union Finance Ministry has granted permission to raise additional financial resources of Rs 9,913 crore to Andhra Pradesh, Telangana, Goa, Karnataka and Tripura through Open Market Borrowings.

Finance Ministry grants permission to raise additional financial resources of Rs 9,913 crore to five states through Open Market Borrowings The permission is accorded after these States met the condition of implementation of the ‘One Nation One Ration Card’.

“The Department of Expenditure, Ministry of Finance, has granted permission to raise additional financial resources of Rs. 9,913 crore to 5 (five) States through Open Market Borrowings (OMBs). These 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,” read a press statement from the Ministry of Finance on Thursday.

According to the press statement, the state-wise details of the additional borrowing permission granted by the Government of India are as follows: -Andhra Pradesh-Rs 2,525 crore, Telangana – Rs 2,508 crore, Karnataka – Rs 4,509 crore, Goa- Rs.223 crore, and Tripura-Rs 148 crore.

The press statement further read, in view of the unprecedented COVID-19 pandemic the Central Government had in May, 2020 allowed additional borrowing limit of up to 2 percent 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 percent of this is subject to the implementation of following four specific State-level reforms, where the weightage of each reform is 0.25 percent 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 installments of 0.50 per cent each – first immediately to all the States as untied, and the second on undertaking at least 3 out of the above-mentioned reforms,’ the press statement read

The Government of India has already granted permission to States to raise the first 0.50 percent as OMB in June, 2020. This made an additional amount of Rs 1,06,830 crore available to the States, it added.