Ministry of Finance
Ministry of Finance

Kerala becomes 8th State to complete Ease of Doing Business reforms

State allowed additional borrowing permission of Rs 2,261 crore

New Delhi, January 13, 2021

Kerala has become the eighth State in the country to successfully undertake “Ease of Doing Business” reform, making it eligible to mobilise additional financial resources of Rs 2,261 crore through Open Market Borrowings.

The necessary permission was granted by the Department of Expenditure, Union Ministry of Finance, on January 12, an official press release said here today.

Kerala has now joined the seven other States -- Andhra Pradesh, Karnataka, Madhya Pradesh, Odisha, Rajasthan, Tamil Nadu and Telangana, who have completed the reforms stipulated by the Department of Expenditure.

On completion of reforms facilitating Ease of Doing Business, these eight States have been granted additional borrowing permission of Rs 23,149 crore, the release said.

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, it said.

The Union Government in May 2020 decided to link grant of additional borrowing permissions to States who undertake the reforms to facilitate ease of doing business. The reforms stipulated in this category are Completion of the first assessment of ‘District Level Business Reform Action Plan’; Elimination of the requirements of renewal of registration certificates/approvals/licences obtained by businesses under various Acts; Implementation of computerized central random inspection system under the Acts wherein 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 inspection report is uploaded within 48 hours of the inspection.

In view of the resource requirement to meet the challenges posed by the COVID-19 pandemic, the Government had on May 17, 2020, 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.

So far, 10 States have implemented the One Nation One Ration Card System, 8 States have completed ease of doing business reforms and 4 States have carried out local body reforms. Total additional borrowing permission issued so far to the States who have completed the reforms stands at Rs 56,526 crore.


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