Andhra, MP permitted to mobilise additional financial resources of Rs 4,898 cr through open market borrowings

New Delhi [India], December 23 : Andhra Pradesh and Madhya Pradesh have taken the lead in undertaking the Urban Local Bodies reforms as the two States have successfully completed the set of reforms in the functioning of ULBs, as specified by the Department of Expenditure, the Ministry of Finance.
To motivate the States to undertake reforms in various citizen-centric sectors, the Ministry of Finance has linked a part of additional borrowing permission granted to the States to the completion of reforms.
"In view of the resource required to meet the challenges posed by the COVID-19 pandemic, the Government of India had on 17th May 2020 enhanced the borrowing limit of the States by 2 per cent of their Gross States Domestic Product (GSDP)," read the release by the Union Finance Ministry.
"Half of this special dispensation was linked to undertaking citizen-centric reforms by the States. The States get permission to raise additional funds equivalent to 0.25 percent of GSDP on completion of reforms in each sector," it said.
According to the Finance Ministry, the four citizen-centric areas identified for reforms were- the Implementation of the One Nation One Ration Card System, Ease of doing business reform, Urban Local body/ utility reforms, and Power Sector reforms.
"On successfully undertaking the ULBs reforms, Andhra Pradesh and Madhya Pradesh have been granted permission to mobilise additional financial resources to the tune of Rs 4,898 crores through open market borrowings," the release said.
"Out of these, Andhra Pradesh has received the permission of Rs 2,525 crores, while Madhya Pradesh has been permitted to mobilize additional Rs 2,373 crores," it said.