AMN / NEW DELHI
Union Ministry of Power has said that in the current financial year almost 20 states have already shown interest in taking benefit under the scheme launched by the Finance Ministry in June last year to allow additional borrowing space to State Governments. It is conditional on them undertaking and sustaining specific reforms in the power sector.
REC Ltd is working as nodal agency for implementation of the scheme, for the Ministry of Power. Based on the recommendations of Ministry of Power in respect of such proposal from Andhra Pradesh, Ministry of Finance had accorded the approval and the state has already availed borrowings of more than 2,100 crore rupees to partly utilize such allowed additional borrowing space.
Proposals of Manipur and Rajasthan are also under active consideration of the Ministry of Finance, both of which may be eligible for the maximum limit of 0.50 per cent of increased borrowing space. The Ministry said, rest of the states are also submitting their proposals.
The additional borrowing limit permitted for power sector reforms is 0.5 per cent of the Gross State Domestic Product of the respective state. Under the scheme, the states may commit to reforms and be eligible for increased borrowing space of 80,000 crore rupees. This scheme adopts a novel approach to incentivize the states, to commit to reforms and in turn, take benefit in the form of availability of enhanced financial resources.