5 states complete reforms in ease of doing business; eligible for Rs 16,728 cr extra borrowing

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5 states complete reforms in ease of doing business; eligible for Rs 16,728 cr extra borrowing

The Minister of Finance said today five states have completed stipulated reforms in the ease of doing business area, allowing them to avail additional financial borrowings worth Rs 16,728 crore. The states getting these benefits are Andhra Pradesh, Karnataka, Madhya Pradesh, Tamil Nadu and Telangana.

“Five states have so far completed the stipulated reforms in the Ease of Doing Business. These States have been granted permission to mobilise additional financial resources to the tune of Rs 16,728 crore through open market borrowings,” the ministry said.

Among these states, Tamil Nadu has received maximum Rs 4,813 crore; followed by Karnataka Rs 4,509 crore; Andhra Pradesh Rs 2,525 crore; Telangana Rs 2,508 crore; and Madhya Pradesh Rs 2,373 crore. The ease of doing business indicator reflects the investment-friendly business climate. The improvement in this area enables faster growth of the state economy.

In May, the Centre had decided to link the grant of additional borrowing permissions to states that’ll undertake the reforms to facilitate ease of doing business.

The reforms included the completion of the first assessment of ‘district-level business reform action plan’; elimination of the need to renew registration certificates or licences obtained by businesses under various acts; implementation of a computerised central random inspection system under the Acts wherein allocation of inspectors is done centrally.

Also read: FinMin extends deadline to implement reform-linked benefits till Feb 15

On May 17, the Centre enhanced the borrowing limit of the states by 2 per cent of their GSDP to meet the fund crunch challenges posed by the Covid-19 pandemic.

Half of this special dispensation was linked to undertaking citizen-centric reforms. The stipulated reforms were identified as the implementation of ‘one nation one ration card’ system; ease of doing business reform; urban local body/utility reforms; and power sector reforms.

So far, 10 states have implemented the one nation one ration card system; 5 states have done ease of doing business reforms; and two states carried out local body reforms.

Besides additional borrowing permissions, the states completing three out of the four reforms will get additional financial help of Rs 2,000 crore. To encourage more states to carry out reforms and avail more loans, the finance ministry recently extended the deadline to complete these reforms from December 31 to February 15.

Also read: FinMin to decide on Rs 14,500 crore capital infusion into banks in Q4