‘Borrowing limit of states raised from 3% of Gross State Domestic Product to 5% in 2020-21’: FM Nirmala Sitharaman

The finance minister said that the state governments, so far, have borrowed only 14% of the limit which is authorised to them while 86% of the limit remains unutilized.

In the final phase of her announcement on the Centre’s ₹20 lakh crore economic stimulus package, Finance Minister Nirmala Sitharaman on Sunday said that the government has decided to increase the borrowing limits of states from 3% to 5% of the Gross State Domestic Product (GSDP) for the year 2020-21.

“The states have seen a sharp decline in the revenue, we have consistently extended help to the states,” she stated. (Bloomberg)

Sitharaman said that the state governments, so far, have borrowed only 14% of the limit which is authorised to them while 86% of the limit remains unutilized.

The finance minister said that part of the borrowing will be linked to specific reforms like increasing job creation through investment and promoting urban development, health and sanitation. This will be done to promote state-level reforms, Sitharaman said on Sunday.

“The states have seen a sharp decline in the revenue, we have consistently extended help to the states,” she stated.

The finance minister informed that despite Centre’s stressed resources, Revenue Deficit Grants of ₹12,390 crores was timely given to various states in April and May. “Devolution of taxes of ₹46,038 was given in full in April,” she said.

Sitharaman said that the government has taken several steps to help states battle the Covid-19 pandemic.

“ ₹15000 crore have been announced for states, essential items, testing labs and kits, along with rolling out of teleconsultation services, the launch of Aarogya Setu app and protection to health care workers with adequate PPEs,” Sitharaman said on Sunday.

The finance minister stated that the Centre has released more than ₹4,113 crore to states. Insurance cover of ₹50 lakhs per person has been announced for healthcare workers.

“Now, Indian public companies can list their securities directly in foreign jurisdictions. Private companies which list Non-Convertible Debentures on stock exchanges will not be regarded as listed companies,” Sitharaman announced.