20 states evince interest to avail extra borrowing for power sector

New Delhi: As many as 20 states have evinced interest for getting additional borrowing space for the power sector under a central scheme while Andhra Pradesh is only state to succeed in getting over Rs 2,100 crore under the programme, a release said.

The Ministry of Finance had launched a programme in June 2021 to allow additional borrowing space of Rs 80,000 crore to states, which is conditional on them undertaking and sustaining specific reforms in the power sector.

The REC Ltd is working as nodal agency for implementation of the scheme, for the Ministry of Power.

A statement issued by power ministry on Tuesday said, "This financial year (2021-22), almost 20 states have already shown interest in taking benefit under the scheme.

"Based on the recommendations of Ministry of Power in respect of such proposal from Andhra Pradesh state, Ministry of Finance had accorded their approval and the state has already availed borrowings of more than Rs 2100 crore, to partly utilize such allowed additional borrowing space."

The proposals of Manipur and Rajasthan are also under active consideration at Ministry of Finance, 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 in the power sector. Rest of the states are also submitting their proposals.

Under the programme, the additional borrowing limit permitted for power sector reforms is 0.5 per cent of the Gross State Domestic Product (GSDP) of the respective state.

This being the first year (2021-22) of the current version of the scheme, the requirements of reforms and actions has been kept less onerous, with the bar raised for future years, pushing the states towards higher level reforms, the ministry stated.