NEW DELHI: The Treasury on Sunday said five states including Tamil Nadu and TelanganaThey were allowed to work for ‘Easy business transaction‘.
Andhra Pradesh, Karnataka and Madhya Pradesh are the other states that were allowed to borrow the additional amount.
The government decided in May to link the issuing of additional credit approval to states with reforms they have implemented to simplify business.
Reforms identified in this category include completing the initial assessment of the district-level enterprise reform action plan.
In addition, removing the requirements for renewal of registration certificates / permits / licenses that companies have obtained for various activities, at least under certain laws set by the Center, has also been part of the reforms.
“So far, 5 states have completed the established reforms to facilitate business transactions. These states have been given permission to mobilize additional funding of 16,728 rupees through bonds on the open market,” the ministry said in a statement.
In order to meet the states ‘additional fund requirements due to the COVID-19 pandemic, the center decided in May to increase the states’ credit limit by 2 percent of their gross domestic product (GSDP) beyond the 3 percent limit set in the law above the financial responsibility and budget management (FRBM) is established.
However, states had to implement four specific reforms – the implementation of “One Nation, One Subscription slip” System, easily undertake business reforms, urban government / utility reforms and energy sector reforms – by February 15, 2020 to reap the benefits.
Such states would be given the option to borrow additional credit equal to 0.25 percent of their GSDP to complete any reform. Under this facility, states will have additional borrowing of up to Rs.214 billion after completing all four reforms.
“So far, 10 states have implemented the One Nation One Ration Card system, 5 states have implemented business-friendly reforms and 2 states have implemented local government reforms,” the ministry added. PTI JD