Four more States complete ease of doing business reforms; Get additional borrowing permission of Rs. 5,034 crore

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Ministry of Finance

Four more States namely, Assam, Haryana, Himachal Pradesh and Punjab have undertaken “Ease of Doing Business” reforms stipulated by the Department of Expenditure, Ministry of Finance. Thus, these State have become eligible to mobilise additional financial resources and have been granted permission to raise additional Rs.5,034 crore through Open Market Borrowings.

These four States are Assam, Haryana, Himachal Pradesh and Punjab. Thus, total number of State who has undertaken the stipulated reforms to facilitate ease of doing business has gone up to 12. Earlier, Andhra Pradesh, Karnataka, Kerala, Madhya Pradesh, Odisha, Rajasthan, Tamil Nadu and Telangana have also reported completion of this reform, which was confirmed by the Department for Promotion of Industry and Internal Trade (DPIIT).

On completion of reforms facilitating ease of doing business, these twelve States have been granted additional borrowing permission of Rs.28,183 crore. State wise amount of the additional borrowing permitted is as under:

Sl.No. State Amount (Rs in crore)
1. Andhra Pradesh 2,525
2. Assam 934
3. Haryana 2,146
4. Himachal Pradesh 438
5. Karnataka 4,509
6. Kerala 2,261
7. Madhya Pradesh 2,373
8. Odisha 1,429
9. Punjab 1,516
10. Rajasthan 2,731
11. Tamil Nadu 4,813
12. Telangana 2,508

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. Therefore, the government of India had in May 2020, decided to link grant of additional borrowing permissions to States who undertake the reforms to facilitate ease of doing business. The reforms stipulated in this category are:

(i)      Completion of first assessment of ‘District Level Business Reform Action Plan’

(ii)     Elimination of the requirements of renewal of registration certificates/approvals/licences obtained by businesses under various Acts.

(iii)    Implementation of computerized central random inspection system under the Acts wherein allocation of inspectors is done centrally, the same inspector is not assigned to the same unit in subsequent years, prior inspection notice is provided to the business owner, and inspection report is uploaded within 48 hours of inspection.

In view of the resource requirement to meet the challenges posed by the COVID-19 pandemic, the Government of India had on 17th May, 2020 enhanced the borrowing limit of the States by 2 percent 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 (a) Implementation of One Nation One Ration Card System, (b) Ease of doing business reform, (c) Urban Local body/ utility reforms and (d) Power Sector reforms.

Till now, 17 States have carried out at least one of the four stipulated reforms and have been granted reform linked borrowing permissions. Out of these, 12 States have implemented the one nation one ration card system, 12 States have done ease of doing business reforms, 5 States have done local body reforms and 2 States have undertaken power sector reforms. Total reform linked additional borrowing permission issued so far to the States stands at Rs.­­­74,773 crore.

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