20 states show interest for getting additional borrowing space for the power sector

The Ministry of Finance had launched a programme in June 2021 to allow additional borrowing space of Rs 800 billion to states, which is conditional on them undertaking and sustaining specific reforms in the power sector.REC Limited is working as nodal agency for implementation of the scheme, for the Ministry of Power (MoP).

In 2021-22, 20 states have already shown interest in taking benefit for getting additional borrowing space for the power sector under the central scheme. Under the programme, the additional borrowing limit permitted for power sector reforms is 0.5 per cent of gross state domestic product (GSDP)of the respective state.Andhra Pradesh is the only state to succeed in getting over Rs 21 billion under the programme. Manipur and Rajasthan’s proposals are under active consideration at the Finance Ministry, both of which may be eligible for the maximum limit of 0.50 per cent increased borrowing space, based on reforms carried out by them. Rest of the states are also submitting their proposals.

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