Andhra Pradesh and Madhya Pradesh have joined the league of states that have taken the people-centric Urban Local Bodies (ULB) reforms to borrow more from the Centre. While Madhya Pradesh has come up with ‘the Madhya Pradesh Nagarpalik Vidhi Adhyadesh, 2020’, Andhra Pradesh has also issued an Ordinance to amend the Municipal corporation Act, 1995, the Andhra Pradesh Municipalities Act, 1965, the Visakhapatnam Municipal Corporation Act, 1979, the Vijayawada Municipal Corporation Act, 1981, and the Andhra Pradesh Municipal Corporations Act, 1994. On successfully undertaking the ULBs reforms, Andhra Pradesh and Madhya Pradesh have been granted permission to mobilise additional financial resources to the tune of Rs.4,898 crore through open market borrowings.
Out of these, Andhra Pradesh has received the permission of Rs.2,525 crore, while Madhya Pradesh has been permitted to mobilize an additional Rs.2,373 crore, according to the Ministry of Finance. It is to be noted that to motivate the states to undertake reforms in various citizen-centric sectors, the Ministry of Finance has linked a part of additional borrowing permission granted to the States to completion of reforms.
In addition to the urban local body/ utility reforms, other reforms specified as a pre-condition to avail additional borrowing are One Nation One Ration Card, ease of doing business reform, and power sector reforms. The states are taking measures to bring the above reforms as well, which are directly intended to benefit the common people. 9 states — Andhra Pradesh, Goa, Haryana, Karnataka, Kerala, Telangana, Tripura, and Uttar Pradesh — have successfully rolled out the PDS reform. On completion of reforms, additional borrowing permission of Rs 23,523 crore has also been issued to these states, the finance ministry had earlier apprised.
Meanwhile, the Scheme was announced by Finance Minister Nirmala Sitharaman on 12 October 2020, as part of the Atmanirbhar Bharat package. It is aimed at boosting capital expenditure by the state governments who are facing a difficult financial environment this year due to the shortfall in tax revenue arising from the COVID-19 pandemic. Under the scheme, an amount of Rs.2,000 crore is earmarked to reward the states who undertake the prescribed citizen-centric reforms.