Centre allows AP, M.P. to borrow ₹4,898 cr extra post ULB reforms

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The Centre has permitted two States — Andhra Pradesh and Madhya Pradesh — to borrow additional financial resources to the tune of ₹4,898 crore following reforms they implement in their urban local bodies (ULBs), the Finance Ministry said on Wednesday.

Both the States have completed the set of reforms required in the functioning of ULBs, as specified by the Department of Expenditure.

“Andhra Pradesh and Madhya Pradesh have been granted permission to mobilise additional financial resources to the tune of ₹4,898 crore through open market borrowings.

“Andhra Pradesh has received permission for ₹2,525 crore, while Madhya Pradesh has been permitted to mobilise an additional ₹2,373 crore,” the Ministry said in a statement. Reforms in the urban local bodies and the urban utilities are aimed at financially strengthening and to enable them to provide better public health and sanitation services.

Economically rejuvenated ULBs will also be able to create good civic infrastructure, the Ministry added.

The Centre had in May enhanced the borrowing limit of the States by 2 per cent of their Gross States Domestic Product with half of the special dispensation linked to citizen centric reforms by the States.

Citizen centric areas

The States get permission to raise additional funds equivalent to 0.25 per cent of GSDP on completion of reforms in each sector — implementation of One Nation One Ration Card system, ease of doing business reform, urban local body/utility reforms and power sector reforms.

Besides the ULB reforms undertaken by Andhra Pradesh and Madhya Pradesh, 10 States have implemented the One Nation One Ration Card system and six States have made the ease of doing business reforms, so far, the Ministry added.

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