No restrictions on utilisation of additional borrowing by states.

by mehekkaoberoi
  • The Centre has not imposed any restrictions on states for utilisation of additional borrowing of 2 per cent and they are free to spend as per their requirements, a senior Finance Ministry official has said.
  • The basic limit of 3 per cent remains unconditional, while only additional one per cent out of the two is linked to citizen centric reforms.
  • Finance Minister Nirmala Sitharaman while announcing this May 17 had said that an increase in borrowing limits will be subject to states taking citizen centric reforms, which are aimed at improving quality of service delivery to the public.
  • In order to help states to enhance their resource base in times of the Covid-19 crisis, the central government allowed them to go in for additional borrowing of 2 per cent, over and above the regular limit of 3 per cent of the GSDP, subject to certain conditions.
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