The Centre has allowed Madhya Pradesh to borrow an additional 14.23 bln rupees this financial year to undertake reforms related to the power sector, the finance ministry said in a release. "Till now, 14 states have carried out at least one of the four stipulated reforms and have been granted reform linked borrowing permissions...
Total reform linked additional borrowing permission issued so far to the states stands at 627.62 bln rupees," the release said. Of the 14 states, 11 have implemented the 'One Nation One Ration Card' system, eight have carried out reforms to boost ease of doing business, and four have carried out local body reforms, while Madhya Pradesh has implemented power sector reforms, it said.
Madhya Pradesh has started direct benefit transfer of electricity subsidy to farmers in one district of the state with effect from December. As part of a stimulus package to mitigate the economic fallout of the COVID-19 pandemic, the Centre had in May increased the market borrowing limit of states to 5.0% of gross state domestic product from 3.0% for 2020-21 (Apr-Mar), subject to the states undertaking certain reforms. Of the higher borrowing limit, 0.5% or 1.07 trln rupees was unconditional and was released in June.
Another 0.5% was allowed after states opted to borrow from the special window to meet the shortfall in goods and services tax compensation. The remaining 1.0% was linked to states implementing reforms in four areas--ration cards, ease of doing business, local bodies, and power sector. States were promised additional borrowing limit of 0.25% for each of the four reforms.
