Odisha Government Working On Reforms To Boost Borrowing Limit
Amidst the COVID-19 crisis, when overall revenues have tanked and expenditure on resources have soared, the Odisha government is working on immediate reforms as suggested by the Centre to boost its borrowing limit and meet costs.
The Centre has opened the avenue via several escape clauses for states to meet high expenditures at the moment, by relaxing the borrowing limit to approximately five percent of the state’s Gross State Domestic Product (GSDP) from the existing three percent. However, this is only applicable for the present fiscal year, keeping in mind the extraordinary circumstances.
Odisha’s GSDP was pegged by the Finance Ministry at ₹5.96 lakh crores, of which it is generally entitled to borrow ₹17,786 crores (at 3% of its GSDP). Under the new norms, while no condition has to be met to stretch borrowing by 0.5%, states that intend to seek upto 5% of their GSDP’s worth need to implement a slew of reforms to be eligible for the heightened borrowing. It includes implementation of the one nation, one ration card scheme, bringing in reforms in the energy sector for DISCOMs and taking solid measures to improve revenues for urban local bodies and businesses.
“We have asked the concerned departments to work on the implementation of the reforms as suggested by the Centre for increasing the borrowing limit. Some of the departments have already started their work. If reforms are implemented, we can increase the borrowing limit,” a senior official said, on condition of anonymity.