Punjab Cabinet gives in-principle approval to a slew of reforms for availing additional GSDP borrowing
With the state looking at 30 percent shortfall in revenue receipts in FY 2020-21, the Council of Ministers on Wednesday gave in-principle approval to a slew of reforms to make Punjab eligible to avail additional borrowing of 1.5 percent of Gross State Domestic Product (GSDP) amid COVID-19, as mandated by the Government of India.
Meanwhile, a committee will be established to ensure proper monitoring of the implementation of the reforms, of which the Administrative Departments will ensure completion within the time frame stipulated by the Centre since the additional borrowing limit is available only for Financial Year 2020-21.
The Cabinet, led by Chief Minister Captain Amarinder Singh, also gave in-principle approval to amend the Punjab Fiscal Responsibility and Budget Management Act, 2003 accordingly. It also authorised the Chief Minister to okay the final draft as approved by the Legal Remembrance (LR).
Likewise, a spokesperson of the Chief Minister’s Office pointed out that the Government of India (GoI) had decided to permit an additional borrowing limit of up to 2 percent of GSDP by States in FY 2020-21. However, the relaxation in borrowing limits is partly unconditional to the extent of 0.5 percent only and partly conditional to the implementation of reforms such as `one nation one ration card’ system, ease of doing business, as well as reforms in the urban local body/utility and power sectors.
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The weightage of each reform is 0.25 percent of GSDP, thus amounting 1 percent. The remaining borrowing limit of 1% would be released in two installments of 0.50 percent each - the first in untied form, immediately to all the States, and the second on undertaking at least three of the specified reforms.
-PTC News
