Ration card mobility reform: 5 states get to borrow Rs 9,913 crore more

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September 25, 2020 6:10 AM

The Union expenditure department has granted the additional borrowing permission to Karnataka for Rs 4,509 crore, followed by Andhra Pradesh (Rs 2,525 crore), Telangana (Rs 2,508 crore), Goa (Rs 223 crore) and Tripura (Rs 148 crore).

Sources have said an acute resource crunch has prompted the government to keep alive plans to raise its gross market borrowing again in FY21, having already hiked it by 54% from the budgetted level to Rs 12 lakh crore.Sources have said an acute resource crunch has prompted the government to keep alive plans to raise its gross market borrowing again in FY21, having already hiked it by 54% from the budgetted level to Rs 12 lakh crore.

The Centre on Thursday granted permission to five states to raise a total of Rs 9,913 crore in additional market borrowings for implementing the one-nation-one-ration-card system, one of the four reform conditions identified for availing additional borrowing window of up to 2% of GSDP in FY21.

The Union expenditure department has granted the additional borrowing permission to Karnataka for Rs 4,509 crore, followed by Andhra Pradesh (Rs 2,525 crore), Telangana (Rs 2,508 crore), Goa (Rs 223 crore) and Tripura (Rs 148 crore).

In view of the unprecedented Covid-19 pandemic, the Centre had in May allowed additional borrowing limit of up to Rs 4,27,302 crore (2% of GSDP) to states for FY21. One percentage point of this is subject to implementation of following 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 1 percentage point was to be released in two instalments of 0.5% each – first immediately to all the states as untied, and the second on undertaking at least 3 out of the above mentioned reforms.

The Centre has already granted permission to states to raise the first 0.5% as market borrowing in June. This made available an additional amount of Rs 1,06,830 crore to the states.

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