NEW DELHI: The Ministry of Finance on Friday approved an additional borrowing facility of Rs 7,309 crore for Rajasthan and Andhra Pradesh to carry out specified power sector reforms.
Rajasthan has been given permission to borrow an additional Rs 5,186 crore, while Andhra Pradesh has been given permission to borrow Rs 2,123 crore, according to the 15th Finance Commission's report.
Apart from Rajasthan and Andhra Pradesh, nine other states have submitted applications to the Ministry of Power for consideration: Assam, Goa, Kerala, Manipur, Meghalaya, Odisha, Sikkim, Tamil Nadu, and Uttar Pradesh.
On receipt of a recommendation from the Ministry of Power, further borrowing authority will be granted to the qualified states.Based on the reforms made by the states in the power sector, the Ministry of Finance has agreed to offer additional borrowing space to the states of up to 0.5 percent of GSDP per year for a four-year period from 2021-22 to 2024-25.
Finance Minister Nirmala Sitharaman announced this in her Budget speech for 2021-22. This will provide the states with new resources of more than Rs 1 lakh crore every year. A state government must complete a set of necessary reforms and fulfil specified performance criteria in order to get further borrowing for electricity sector improvements.