Twenty states who have successfully completed the “Ease of Doing Business” reforms have turned eligible for addtional borrowing of 0.25 per cent of Gross State Domestic Product (GSDP).

Five more — Arunachal Pradesh, Chhattisgarh, Goa, Meghalaya and Tripura have completed the “Ease of Doing Business” reforms stipulated by the Department of Expenditure but are not in the eligibility list for the borrowing.

Accordingly, on receipt of recommendations from the Department for Promotion of Industry and Internal Trade (DPIIT), the Department of Expenditure has granted permission to these 20 States to raise additional financial resources of Rs 39,521 crore through Open Market Borrowings.

The ease of doing business is an important indicator of the investment friendly business climate in the country. Improvements in the ease of doing business will enable faster future growth of the state economy.

Therefore, the government of India had in May 2020, decided to link grant of additional borrowing permissions to States who undertake the reforms to facilitate ease of doing business.

In view of the resource requirement to meet the challenges posed by the Covid-19 pandemic, the Government of India had on May 17, 2020, enhanced the borrowing limit of the states by 2 per cent of their GSDP.

Half of this special dispensation was linked to undertaking citizen-centric reforms by the states. The four citizen centric areas for reforms identified were Implementation of One Nation One Ration Card System, Ease of doing business reform, Urban Local body/utility reforms and Power Sector reforms.