State recommended for extra borrowing
CHANDIGARH : The Union ministry of commerce and industry on Tuesday recommended the Punjab government for additional borrowing for carrying out statelevel ease of doing business reforms.
The additional borrowing of 0.25% of gross state domestic product (GSDP) has been sanctioned to the cash-strapped state on implementation of district level business reforms action plan, renewal reforms and inspection reforms. “The implementation details have been scrutinized…the state may be allowed the additional borrowing, the department for promotion of industry and internal trade wrote to the department of expenditure, Union ministry of finance.
The recommendation came after state’s industries and commerce department implemented all 35 applicable reforms of district level reforms action plan, allowed approval of renewal of certificates, approvals and licences, and complied with all requirements for setting up the Central Random Inspection System, according to sources. The state government was to implement these reforms till November
30, but additional time of two months was allowed later.
Also, the Union power ministry is learnt to have recommended the state for additional borrowing of 0.15 per cent of GSDP for implementing an alternative scheme, Paani Bachao Paisa Kamao, in 11 districts in place of direct benefit transfer. Introduction of DBT to all farmers in lieu of free electricity given to them was among the reforms suggested by the Centre for additional borrowing. The state government gave in-principle approval to DBT last year but then developed cold feet.
These are part of the reformslinked additional borrowing – 5% of GSDP, instead of 3% — allowed by the Centre to states for financial year 2020-21 to meet their spending needs, amid the drastic fall in revenue due to the coronavirus-induced national lockdown.
The 2% increase in borrowing limit is expected to allow the state government headroom of Rs 12,000 crore more in 2020-21.
ADDITIONAL BORROWING OF 0.25% OF GSDP HAS BEEN SANCTIONED TO THE STATE