New Delhi: The Centre on Wednesday said it has permitted Kerala to borrow an additional Rs 2,373 crore after the state successfully undertook ‘ease of doing business’ reforms.
Kerala has now joined seven other states — Andhra Pradesh, Karnataka, Madhya Pradesh, Odisha, Rajasthan, Tamil Nadu and Telangana — which have completed the reforms facilitating ease of doing business to be eligible for the additional borrowing.
These eight states have been granted an additional borrowing permission of Rs 23,149 crore.
“Thus, the state (Kerala) has become eligible to mobilise additional financial resources of Rs 2,373 crore through open market borrowings. Permission for the same was issued by the Department of Expenditure on January 12,” the Finance Ministry said in a statement.
The ease of doing business is an important indicator of the investment-friendly business climate in the country.
The government had in May, as part of the ‘Aatmanirbhar Bharat’ package, announced to link grant of additional borrowing permissions to states who undertake the reforms to facilitate ease of doing business.
The reforms stipulated in this category include completion of first assessment of ‘District Level Business Reform Action Plan’, elimination of requirements of renewal of registration certificates/approvals/licences obtained by businesses under various Acts.
In view of the resource requirement to meet the challenges posed by the COVID-19 pandemic, the government had in May enhanced the borrowing limit of the states by 2 per cent of their GSDP.
Half of this special dispensation was linked to the states undertaking citizen centric reforms — implementation of ‘One Nation One Ration Card System’, ease of doing business reforms, urban local body/utility reforms and power sector reforms.
So far, 10 states have implemented the One Nation One Ration Card System, eight states have done ease of doing business reforms, and four states have done local body reforms.
Total additional borrowing permission issued so far to the states, which have done the reforms, is Rs 56,526 crore, the statement said.