5 months ago
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States may be able to tap about ₹2.04 lakh crore as additional borrowings over and above their net borrowing limits for the year, the Finance Ministry indicated on Tuesday.
The Centre had allowed 22 States to raise additional borrowings of almost ₹61,000 crore this year on top of their net borrowing ceilings of 3% of Gross State Domestic Product (GSDP), as of October 27, the Ministry said .
The extra borrowing ceiling was granted to States who met their pension liabilities by making required contributions to the National Pension System (NPS), which oversees the retirement savings of government employees since 2004.
Moreover, States are eligible to raise a little more than ₹1.43 lakh crore this year, based on the recommendations of the Ministry of Power. This is linked to the Fifteenth Finance Commission’s (FFC) suggestion to grant States an additional borrowing space of 0.5% of GSDP as a performance-based incentive for carrying out reforms in the power sector that improve operational and economic efficiency.
While the normal net borrowing ceiling for States is fixed at ₹8,59,988 crore for this year, in line with the recommendations of the FFC, approvals have been issued for raising ₹6.99 lakh crore for open market borrowings, with ₹69,371 crore allowed to be raised as negotiated loans, the Ministry said.
