Four more States complete Ease of Doing Business reforms; get additional borrowing permission of Rs 5,034 crore
Ministry of Finance

Four more States complete Ease of Doing Business reforms; get additional borrowing permission of Rs 5,034 crore

New Delhi, February 7, 2021

Four more states have implemented the Ease of Doing Business reforms stipulated by the Department of Expenditure, Ministry of Finance, becoming eligible to mobilise additional financial resources of Rs 5,034 crore through open market borrowings.

With this, 12 States have implemented Ease of Doing Business reforms and have got additional borrowing permission of Rs. 28,183 crore, the Ministry said in a press release.

The four new additions to the list are Assam, Haryana, Himachal Pradesh and Punjab. Earlier, Andhra Pradesh, Karnataka, Kerala, Madhya Pradesh, Odisha, Rajasthan, Tamil Nadu and Telangana had reported completion of this reform, which was confirmed by the Department for Promotion of Industry and Internal Trade (DPIIT).

The Ease of Doing Business is an important indicator of the investment-friendly business climate in the country. Improvements in the Ease of Doing Business will enable faster future growth of the state economy. Therefore, the Union Government had in May 2020, decided to link grant of additional borrowing permissions to States which undertake the reform.

The reforms stipulated in this category are completion of the first assessment of District Level Business Reform Action Plan and elimination of the requirements of renewal of registration certificates, approvals and licences obtained by businesses under various Acts.

It also involves the implementation of a computerized central random inspection system under the Acts where the allocation of inspectors is done centrally. The same inspector is not assigned to the same unit in subsequent years, prior inspection notice is provided to the business owner and the inspection report is uploaded within 48 hours of the inspection.

Because of the resources required to meet the challenges posed by the COVID-19 pandemic, the Government had, on May 17, enhanced the borrowing limit of the States by 2% of their GSDP. Half of this special dispensation was linked to undertaking citizen-centric reforms by the States. The four citizen-centric areas for reforms identified were Implementation of One Nation One Ration Card System, Ease of Doing Business reform, Urban Local Body/Utility reforms and Power Sector reforms.

Till now, 17 States have carried out at least one of the four stipulated reforms and have been granted reform-linked borrowing permissions.

Out of these, 12 States have implemented the one nation one ration card system, 12 States have done ease of doing business reforms, five States have done local body reforms and two States have undertaken power sector reforms. Total reform linked additional borrowing permission issued so far to the States stands at Rs 74,773 crore, the release added.

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