Seven more states implement reforms, earn more borrowing capacity

According to the latest figures by the Ministry of Finance, five more states – Bihar, Goa, Karnataka, Rajasthan, and Uttarakhand, have become eligible for power sector’s reform-linked borrowings.

The borrowing cap for the states is linked to undertaking reforms in the power sector. Reforms include meeting the target of reduction in aggregate technical and commercial (AT&C) losses, achieving the targeted reduction in average cost of supply and average revenue realisation (ACS-ARR) gap or undertaking direct benefit transfer (DBT) of electricity to farmers. These five states have either reduced AT&C losses or met the ACS-ARR gap target. Meeting the reform requirements has made these states eligible to mobilise additional resources of Rs 20.94 billion. Earlier, Andhra Pradesh and Madhya Pradesh had become eligible for additional borrowing by undertaking DBT of electricity to farmers. So far, these seven states which have undertaken power sector reforms have been permitted additional borrowings of Rs 50.32 billion

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