Centre gives nod to 5 states to raise additional borrowings of Rs 9,913 cr via OMBs

Business
Typography

This permission has been accorded after these states successfully met the reform condition of implementation of One Nation One Ration Card system

The Centre has granted permission to raise additional financial resources of Rs 9,913 crore to five states through Open Market Borrowings (OMBs).

These states are Andhra Pradesh, Telangana, Goa, Karnataka and Tripura, said the Ministry of Finance on Thursday.

This permission has been accorded after these states successfully met the reform condition of implementation of One Nation One Ration Card system.

Accordingly, the Department of Expenditure accorded approval to Andhra Pradesh to raise additional borrowing of Rs 2,525 crore), Telangana (Rs 2,508 crore), Karnataka (Rs 4,509 crore), Goa (Rs 223 crore) and Tripura (Rs 148 crore).

In view of the unprecedented COVID-19 pandemic the Centre had in May this year 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 implementation of following four specific state level reforms, where weightage of each reform is 0.25 percent of GSDP. These reforms are 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 percent was to be released in two installments of 0.50 percent 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 already granted permission to states to raise the first 0.50 percent as OMB in June this year. This made an additional amount of Rs 1,06,830 crore available to the states.

Image credit: File photo

All Comments