Finance Ministry allows 2 states to borrow additional Rs 7,309 cr

The finance ministry on Friday granted additional borrowing permission of Rs 7,309 crore to two states for undertaking stipulated power sector reforms.


Rajasthan and Andhra Pradesh have been allowed to borrow additional Rs 5,186 crore and Rs 2,123 crore, respectively.

“Department of Expenditure has granted additional borrowing permission of Rs. 7,309 crore to two States for undertaking the stipulated reforms in the power sector,” an official statement said.

finance ministry

The ministry, based on the recommendations of the 15th Finance Commission, has decided to grant additional borrowing space of up to 0.5 percent of the Gross State Domestic Product (GSDP) to the states every year for a four-year period from 2021-22 to 2024-25 based on reforms undertaken by them in the power sector.

This will make available additional resources of more than Rs 1 lakh crore every year to the states.

power sector reforms: finmin allows 2 states to borrow additional rs 7,309 cr - businesstoday

The objectives of the additional borrowing permissions are to improve the operational and economic efficiency of the sector, and promote a sustained increase in paid electricity consumption, the statement added.

Apart from Rajasthan and Andhra Pradesh, nine states — Assam, Goa, Kerala, Manipur, Meghalaya, Odisha, Sikkim, Tamil Nadu and Uttar Pradesh — have also submitted their proposals to the Ministry of Power, which are under examination.

finmin allows two states to borrow additional rs 7,309 cr for power reforms - creatives writing

Additional borrowing permission will be issued to eligible states on receipt of recommendation from the power ministry, the statement added.

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