The Ministry of Finance has granted additional borrowing permissions totalling Rs. 7,309 crore to Rajasthan and Andhra Pradesh. This funding is an incentive for these states to undertake crucial reforms in their power sectors. The initiative, announced in the 2021-22 Budget, allows states to borrow up to 0.5% of their GSDP annually for four years if they meet specific reform criteria, aiming to improve the sector's efficiency and promote increased electricity consumption.
Additional resources of Rs. 7,309 crore made available to States for undertaking power sector reforms
11 States have claimed additional borrowing based on reforms undertaken in power sector
Department of Expenditure, Ministry of Finance has granted additional borrowing permission of Rs.
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FAQ :
Additional resources of Rs. 7,309 crore have been granted to two states for undertaking power sector reforms.
Rajasthan has been allowed to borrow an additional Rs. 5,186 crore, and Andhra Pradesh has been allowed to borrow an additional Rs. 2,123 crore.
The objectives are to improve the operational and economic efficiency of the power sector and to promote a sustained increase in paid electricity consumption.
Mandatory reforms include the state government progressively assuming responsibility for DISCOM losses, ensuring transparency in financial reporting, timely audits, and compliance with legal and regulatory requirements.
Performance is evaluated based on criteria such as metered electricity consumption, direct benefit transfer for subsidies, timely bill payments by government departments, and the use of innovative technologies.
The Ministry of Power is the nodal ministry responsible for assessing the performance of states and determining their eligibility for additional borrowing permission.