Andhra Pradesh and Uttar Pradesh get additional borrowing limit of Rs 7,106 crore

The states of Andhra Pradesh (AP) and Uttar Pradesh (UP) have been granted an additional borrowing limit of Rs 7,106 crore based on reforms in the public distribution system (PDS) and the ease of doing business (EoDB), a finance ministry statement said on Friday.

While UP has been permitted to borrow Rs 4,851 crore on account of One Nation One Ration Card System (ONORCS) reforms under the PDS, AP will be allowed to undertake open market borrowings of another Rs 2,252 crore for making the state more investor and business-friendly, it said.

This makes AP the first state to achieve the second tranche of the additional borrowing limit of 0.25% of gross state domestic product (GSDP)

On September 24, five states including AP, Telangana, Goa, Tripura and Karnataka were granted the increased borrowing limit after implementing the PDS related reforms.

In May, the Centre had allowed the states an additional borrowing of 2% of GSDP out of which 0.25% was contingent upon states undertaking reforms in each of the four areas of ease of doing business, urban local bodies, power sector and the ONORCS.

The ONORCS enables inter-state portability of ration cards to ensure availability of rations under the National Food Security Act and other welfare schemes, aimed at benefiting migrant workers.

The system involves Aadhaar seeding of all ration cards and biometric authentication of beneficiaries at all Fair Price Shops, which removes bogus ration cards and reduces leakages, the ministry said.

The department of food and public distribution has been assigned as the nodal body to assess and confirm if states have undertaken these reforms.

Under the EoDB reforms, which is assessed by the department for promotion of industry and internal trade, states are required to eliminate the need for businesses to renew certain approvals and licences, automate the fee collection process and to computerise and streamline random inspections, the statement said.

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