Union Finance Ministry has granted additional borrowing permission to Uttar Pradesh and Andhra Pradesh for successfully undertaking reforms in the Public Distribution System (PDS) and Ease of Doing Business. This will make an additional amount of seven thousand 376 crore rupees available to these states.

In view of the unprecedented COVID-19 pandemic, the Union Government had in May this year allowed additional borrowing limit of up to two per cent of Gross State Domestic Product (GSDP) to the states for the current financial year. This made an amount up to four lakh 27 thousand 302 crore rupees available to the states. One per cent of this additional borrowing limit  is subject to implementation of four specific state-level reforms, where weightage of each reform is 0.25 per cent of GSDP.

These reforms include implementation of One Nation, One Ration Card System, Ease of Doing Business reforms, Urban Local body reforms and Power Sector reforms.

Earlier last week, Telangana, Andhra Pradesh, Goa, Karnataka and Tripura were granted permission to raise additional financial resources of nine thousand 913 crore rupees through Open Market Borrowings upon successfully meeting the reform conditions of implementation of One Nation, One Ration Card System.

Andhra Pradesh has now become the first state in the country to successfully undertake Ease of Doing Business reforms as well and has therefore become eligible to raise an additional amount of two thousand 525 crore rupees through Open Market Borrowings.

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