Ease of doing biz reforms: Kerala gets chance to borrow more

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SME Times News Bureau | 13 Jan, 2021
Kerala has become the eighth state in the country to successfully undertake the "Ease of Doing Business" reform stipulated by the Union Finance Ministry.

With this, the state has become eligible to mobilise additional financial resources of Rs 2,373 crore through Open Market Borrowings.

Permission for the same was issued by the Department of Expenditure on January 12, 2021.

Kerala has now joined seven other states namely, Andhra Pradesh, Karnataka, Madhya Pradesh, Odisha, Rajasthan, Tamil Nadu and Telangana, who have completed this reform.

On the completion of reforms facilitating ease of doing business, these eight states have been granted additional borrowing permission of Rs 23,149 crore.

The ease of doing business is an important indicator of the investment friendly business climate in the country. Improvements in the ease of doing business will enable faster future growth of the state economy.

The government had in May 2020, decided to link the grant of additional borrowing permissions to states who undertake the reforms to facilitate ease of doing business.

In view of the resource requirement to meet the challenges posed by the Covid-19 pandemic, the Government of India had on May 17, 2020 enhanced the borrowing limit of the states by two per cent of their GSDP. Half of this special dispensation was linked to undertaking citizen centric reforms by the states. The four citizen centric areas for reforms identified were implementation of 'One Nation One Ration Card System', Ease of doing business reform, Urban Local body/utility reforms and Power Sector reforms.

So far 10 states have implemented the One Nation One Ration Card System, eight states have done ease of doing business reforms, and four states have done local body reforms. Total additional borrowing permission issued so far to the states, which have done the reforms stands, at Rs 56,526 crore.