May 21, 2024

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Business is my step

Finance Ministry extends deadline for states to implement reforms to avail added borrowing

2 min read

The Finance Ministry has prolonged the deadline till February 15 for states to implement reforms like just one-nation one ration card and all those in the electrical power sector to turn into qualified for added borrowing in the present fiscal, a release said.

To meet up with the additional fund requirements of states on account of COVID-19 pandemic, the Centre in May well had resolved to raise the borrowing limit of the states by 2 per cent of their GSDP, more than and over the 3 for every cent restrict set under the Fiscal Obligation and Funds Management (FRBM) Act.

However, states had been necessary to full four distinct reforms — implementation of one country a single ration card, ease of executing small business reform, city area human body/ utility reforms and electric power sector reforms — by December 31, 2020, to get the positive aspects.

These types of states would get the facility of further borrowing equal to .25 for every cent of their Gross States Domestic Solution (GSDP) for finishing each reform. Less than this facility, more borrowing of up to Rs 2.14 lakh crore is out there to the states on completion of all the 4 reforms.

“The Office of Expenditure has extended the deadline for the states to full citizen centric reforms in different sectors. Now, if the advice from the nodal Ministry concerned with regards to implementation of the reform is acquired by February 15, 2021, the state will be qualified for reform-joined benefits,” the Finance Ministry mentioned in a statement on Wednesday.

So much nine states have applied the a single nation one particular ration card process, four states have accomplished the simplicity of carrying out business reforms and one particular state has completed the city area system/ utility reforms.

“Extra borrowing authorization of Rs 40,251 crore has been granted to these states. Extension of the day for completion of reforms is possible to encourage other states also to complete the reform process expeditiously and avail the linked fiscal gains,” the ministry additional.

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