The finance ministry on Friday allowed additional borrowing permission to five more states, namely Bihar, Karnataka, Goa, Rajasthan and Uttarakhand after the states undertook necessary power sector reforms. As a part of the reform process, these states have successfully met the target set by the Power Ministry for the reduction in Aggregate Technical & Commercial (AT&C) losses or achieved the targeted reduction gap in Average Cost of Supply and Average Revenue Realisation (ACSARR).

Reduction in AT&C losses and ACS-ARR gap are two of the three reforms in the Power Sector stipulated by the Department of Expenditure, Ministry of Finance. A part of the additional borrowing ceiling to the states is linked to undertaking reforms in the power sector.

States get permission to borrow an amount equivalent of 0.05 percent of the Gross State Domestic Product (GSDP) for meeting the target set for the state for the reduction in AT&C losses and additional 0.05 percent of GSDP for crossing the ACSARR gap target.

Uttarakhand has achieved the targets for reduction in both AT&C losses and ACSARR gap. AT&C losses in the state have reduced to 19.01 percent against the target of 19.35 percent. ACS-ARR Gap in the state has been reduced to Rs 0.36 per unit against the target of Rs 0.40 per unit.

Goa has brought down the AT&C losses to 11.21 percent against the target of 13.53 percent. Karnataka has surpassed the ACS-ARR Gap target of Rs 0.50 per unit by reducing the gap to Rs 0.44 per unit. Rajasthan has also achieved the ACS-ARR Gap reduction target.

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