The Ministry of Finance’s Department of Expenditure has granted Assam additional borrowing permission of Rs 1,886 crore.
Additional borrowing approval of Rs 1,886 crore for Assam, Rs 192 crore for Meghalaya, and Rs 180 crore for Manipur has been given by the Ministry of Finance’s Department of Expenditure for executing specified power sector reforms.
Ministry of Finance granted permission to 10 states for additional borrowing
Moreover, On Thursday, the finance ministry announced that 10 states had been granted permission to borrow an additional Rs 28,204 crore in FY22 for power sector reforms.
Andhra Pradesh, Assam, Himachal Pradesh, Manipur, Meghalaya, Odisha, Rajasthan, Sikkim, Tamil Nadu, and Uttar Pradesh are among the ten states.
Meanwhile, in a statement, it said, “Department of Expenditure, Ministry of Finance, has granted additional borrowing permission of Rs 28,204 crore to 10 states for undertaking the stipulated reforms in the power sector in 2021-22”
States can also use the increased borrowing facility tied to power sector changes in the fiscal year 2022-23.
Further, incentives of Rs 1,22,551 crore will be available to states for implementing these reforms in 2022-23, according to the statement.
However, based on the recommendations of the 15th Finance Commission, the ministry of finance decided to offer states additional borrowing capacity of up to 0.5 per cent of GSDP each year for a four-year period from 2021-22 to 2024-25, based on the reforms made by them in the power sector.
The goal of providing financial incentives in the form of increased borrowing authorization for power sector changes is to improve the industry’s operational and economic efficiency, as well as to promote sustained growth in paid energy consumption.
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