“It is expected that many more states will complete this reform before the stipulated date,” the finance ministry said in a statement.
Even though the scheme was announced in May as part of the Atmanirbhar stimulus package, the slow pace of implementing the easiest among the four reforms, indicate that states have braced themselves for lower expenditure in the current fiscal.
It may be recalled that the Centre, in view of the Covid-19 pandemic, had in May allowed additional borrowing limit of up to Rs 4.28 lakh crore (2% of GSDP) to states for FY21.
While 0.5 pecentage point (pp) of the extra borrowing window (Rs 1.07 lakh crore) is available to all states unconditionally, one pp was to be made available in four equal tranches to clearly specified, measurable and feasible reform actions in universalisation of one nation-one ration card, ease of doing business, power distribution and augmentation of urban local body revenues. The balance 0.5 pp was to be accessed by states, subject to their ‘completely achieving’ the milestones in at least three out of four reform areas.
Later, an offer was made by the Centre at the GST Council, whereby the Option 1 came with the incentive of (additional) 0.5 pp unconditional FRBM relaxation for states. So, the unconditional extra borrowing window is effectively 1% of GDP now, and for the balance 1%, there is still a rush.
So far, nine states have successfully implemented one nation-one ration system: Andhra Pradesh, Haryana, Karnataka, Kerala, Telangana, Gujarat, Uttar Pradesh, Goa and Tripura. Uttar Pradesh got an additional borrowing permission for Rs 4,851 crore, followed by Karnataka (Rs 4,509 crore), Gujarat (Rs 4,352 crore) and Andhra Pradesh (Rs 2,525 crore). Portability of ration card is aimed at ensuring that the beneficiaries under the National Food Security Act (NFSA) and other welfare schemes, especially the migrant workers and their families, get ration from any fair price shop (FPS) across the country. Other aims of the intended reform were to better target beneficiaries, elimination of bogus/ duplicate/ineligible ration cards and thus enhance welfare and reduce leakage. For this, the reform conditions stipulated Aadhaar seeding of all ration cards, biometric authentification of beneficiaries and automation of all the FPS in the state.