Finance Ministry grants additional Rs. 28,204 Cr. for undertaking power sector reforms to 10 States – EQ Mag Pro
The objectives of granting financial incentives as additional borrowing permissions for taking up reforms in the power sector are to improve the operational and economic efficiency of the sector and promote a sustained increase in paid electricity consumption.
New Delhi: The Department of Expenditure, Ministry of Finance, has granted additional borrowing permission of Rs. 28,204 crore to 10 States for undertaking the stipulated reforms in the power sector in 2021-22.
States include Andhra Pradesh, Assam, Himachal Pradesh, Manipur, Meghalaya, Odisha, Rajasthan, Sikkim, Tamil Nadu, and Uttar Pradesh.
The highest amount granted is Rs. 7,054 crores to Tamil Nadu. Ministry of Finance, based on the recommendations of the Fifteenth Finance Commission, had decided to grant additional borrowing space of up to 0.5 percent of the Gross State Domestic Product (GSDP) to the States every year for a four year period from 2021-to 22 to 2024-25 based on reforms undertaken by the States in the power sector. This was announced by the Finance Minister in the Budget speech of 2021-22.
The objectives of granting financial incentives as additional borrowing permissions for taking up reforms in the power sector are to improve the operational and economic efficiency of the sector and promote a sustained increase in paid electricity consumption.
In the financial year 2022-23 too, the States can avail of the facility of additional borrowing linked to reforms in the power sector. An amount of Rs. 1,22,551 crore will be available as an incentive to States for undertaking these reforms in 2022-23. States who could not complete the reform process in 2021-22 may also avail of the benefit of additional borrowing earmarked for 2022-23 if they carry out the reforms in a current financial year.
Source: psuconnect
