NEW DELHI: The Centre on Thursday allowed five states to raise an additional Rs 9,913 crore in open market borrowings (OMBs)—beyond the permitted three per cent of their respective gross state domestic product (GSDP).
According to the Finance Ministry, the states of Andhra Pradesh, Telangana, Goa, Karnataka and Tripura may raise additional funds since they successfully met reform conditions in implementing the One-Nation-One-Ration Card System.
“The Department of Expenditure, Ministry of Finance, has granted permission to raise additional financial resources of Rs. 9,913 crore to 5 (States through Open Market Borrowings (OMBs). This permission has been accorded after these States successfully met the reform condition of implementation of One Nation One Ration Card System,” said the Finance Ministry.
According to current rules, states cannot borrow more than 3 per cent of their GSDP. However, the government has relaxed this norm due to the pandemic, and said that states may go for additional borrowings of up to two per cent of their GSDP for 2020-21. However, there was a rider that half of this could be raised only subject to the implementation of four specific state level reforms.
These reforms were the ‘One nation, one ration card’ system; ease of doing business; urban local body and utility reforms; and power sector reforms. The Centre had already granted permission to states to raise the first 0.50 per cent in June, 2020. This means, Karnataka can now borrow an additional Rs 4,509 crore, while Andhra Pradesh can raise Rs 2,525 crore more, followed by Telangana at Rs 2,508 crore. Goa has been allowed to raise Rs 223 crore extra from markets and Tripura Rs 148 crore.