Ease of Doing Business: Govt permits these 5 states for additional market borrowing of Rs 16,728 cr

Ease of Doing Business: Govt permits these 5 states for additional market borrowing of Rs 16,728 cr

Investors WealthThe Department of Expenditure had recently extended the deadline for states to complete citizen-centric reforms in various sectors.

The government on Sunday said it has permitted five states viz., Andhra Pradesh, Karnataka, Madhya Pradesh, Tamil Nadu, and Telangana, to cumulatively borrow an additional Rs 16,728 crore through the open market towards ease of doing business in their respective geographies. The government had decided in May this year to link grant of additional borrowing permissions to states completing the stipulated reforms to facilitate ease of doing business. While Tamil Nadu has been permitted to borrow Rs 4,813 crore, Karnataka has been allowed to borrow Rs 4,509 crore. Andhra Pradesh, Telangana, and Madhya Pradesh can borrow Rs 2,525 crore, Rs 2,508 crore, and Rs 2,373 crore respectively, Finance Ministry said in a statement.

The reforms stipulated by the government included completion of the first assessment of the district level Business Reform Action Plan (BRAP), eliminating the need to renew registration certificates/approvals/licences for various activities under Shops & Establishment Act, Contracts Labour (Regulation and Abolition) Act, 1970, Factories Act, 1948, Legal Metrology Act, Inter-State Migrant Workmen (RE&CS) Act, 1979, Drug Manufacturing/ Selling/ Storage License, and Trade License issued by municipal corporations.

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Another reform mandated was the implementation of computerised central random inspection system under multiple acts wherein allocation of inspectors is done centrally and the same inspector is not assigned to the same unit in subsequent years. Also, prior inspection notice has to be provided to the business owner, and the inspection report is uploaded within 48 hours of the inspection. The acts included Equal Remuneration Act, 1976, Minimum Wages Act, 1948, Shops and Establishments Act, Payment of Bonus Act, 1965, Payment of Wages Act, 1936, Payment of Gratuity Act, 1972, Contract Labour (Regulation and Abolition) Act, 1970, Factories Act, 1948, Boilers Act, 1923, Water (Prevention and Control of Pollution) Act, 1974, Air (Prevention and Control of Pollution) Act, 1981 and Legal Metrology Act, 2009 and Rules.

Also read: A lonely furrow: Why farmers need more than a rewriting of regulations

The government had on May 17, 2020, increased the borrowing limit of states by 2 per cent of their gross state domestic product to help them fight Covid-induced challenges, the ministry said. 50 per cent of this special dispensation for states was linked to carrying out four citizen-centric reforms including implementation of One Nation One Ration Card System, ease of doing business, urban local body/ utility reforms, and power sector reforms. So far, while 10 states have been able to implement the One Nation One Ration Card System, five states have done Ease of Doing Business reforms, and only 2 have undertaken local body reforms.

Apart from getting permission for additional borrowing, states implementing three out of the four reforms would be eligible for further financial assistance under the Scheme for Financial Assistance to States for Capital Expenditure. The government has earmarked Rs 2,000 crore for the same. Moreover, the Department of Expenditure had recently extended the deadline for states to complete citizen-centric reforms in various sectors. “Now, if the recommendation from the nodal Ministry concerned regarding the implementation of the reform is received by 15th February 2020, the state will be eligible for reform linked benefits,” the ministry added.

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