Kerala granted Rs 2,373 crore additional borrowing limit

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Kerala has been granted an additional borrowing limit worth Rs 2,373 crore by the Centre after becoming the eighth state to implement the ease of doing business (EoDB) reforms, a finance ministry statement said on Wednesday.

The latest development took the total additional borrowing granted to the states on account of EoDB reforms to Rs 23,149 crore so far, the statement said.

Apart from Kerala, the seven other states included Tamil Nadu (TN), Telangana, Rajasthan, Andhra Pradesh, Odisha, Madhya Pradesh and Karnataka.

Of these, TN was permitted the highest open market borrowing limit for EoDB reforms at Rs 4,813 crore, followed by additional borrowings of Rs 4,509 crore granted to Karnataka and Rs 2,731 crore to Rajasthan.

As part of the first tranche of the Atmanirbhar Bharat package in May last year, finance minister Nirmala Sitharaman had announced an additional borrowing limit for the states of 2% of gross state domestic product to meet their pandemic-related expenses.

From this amount, 1% was made conditional to the states successfully implementing reforms in the four areas of EoDB, One Nation One Ration Card System (ONORCS), urban local bodies (ULB) and the power sector.

“Improvements in the ease of doing business will enable faster future growth of the state economy. Therefore, the government of India had in May 2020, decided to link grant of additional borrowing permissions to States who undertake the reforms to facilitate ease of doing business,” the ministry said.

As part of the Centre’s stipulations on EoDB reforms, the states have to complete an assessment of the ‘District Level Business Reform Action Plan’, eliminate the need for renewal of approvals or licenses under various Acts and implement a computerised central random inspection system.

Till date, total additional borrowing limits worth Rs 56,526 crore have been granted to ten states for implementing the ONORCS and to four states for the ULB reforms apart from the eight that have implemented the EoDB reforms.

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