The Finance Ministry on Thursday said 10 states were allowed to borrow an additional Rs 28,204 crore in FY22 to reform the power sector. The 10 states are Andhra Pradesh, Assam, Himachal Pradesh, Manipur, Meghalaya, Odisha, Rajasthan, Sikkim, Tamil Nadu and Uttar Pradesh.
The Department of Expenditure, Ministry of Finance has allowed additional borrowing of Rs 28,204 crore to 10 states to meet the prescribed reforms in the power sector in 2021-22.
In the financial year 2022-23 also, states can avail the facility of additional borrowing linked to reforms in the power sector. It said an amount of Rs 1,22,551 crore would be available as incentive to the states to undertake these reforms in 2022-23.
Based on the recommendations of the 15th Finance Commission, the Finance Ministry had decided to provide additional borrowing space to the states up to 0.5 per cent of the Gross State Domestic Product (GSDP) every year for a period of four years from 2021-22 to 2024. -25 Based on the reforms made by him in the power sector.
The financial incentives in the form of additional borrowing permits to reform the power sector are aimed at improving the operational and economic efficiency of the sector and promoting sustained growth in the consumption of paid electricity.
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