Finance
The Finance Ministry sanctioned an additional borrowing of Rs 60,876.8 crore for 22 states to contribute to the National Pension Scheme (NPS) in 2023-24 on Tuesday.
This is in addition to the net borrowing limit for 2023-24.
The standard limit for state net borrowing has been set at 3% of their gross state domestic product (GSDP). The current GSDP is Rs 8.59 lakh crore. In addition, the ministry approved raising Rs 6.99 lakh crore for open market borrowing and Rs 69,370.81 crore for negotiated loans for 2023-24.
The finance ministry stated that it has also permitted states to borrow additional funds comparable to the employer and employee share of contribution of its employees, in excess of the 3% ceiling.
Earlier in June, the Centre granted extra financial incentives totaling Rs 66,413 crore for electricity sector reforms in 12 states.
The project was launched by the Union Finance Minister in the Union Budget 2021-22. Under this plan, states will have access to an additional borrowing capacity of up to 0.5% of GSDP per year for the next four years, from 2021-22 to 2024-25.
The ministry announced on Tuesday that it had approved additional borrowing of Rs 39,175 crore for 12 states in 2021-22 and Rs 27,238 crore for 6 states in 2022-23, contingent on performance in the electricity sector.
On the suggestion of the electricity ministry, states are entitled to borrow Rs 1.43 lakh crore for 2023-24.
Source:IANS
