POWER THERMAL Centre to release 80K cr to states for power sector reform Centre launched a programme in June this that allows additional borrowing space to State Governments sustaining specific reforms in the power sector. The additional borrowing limit permitted for power sector reforms is 0.5% of the Gross State Domestic Product (GSDP) of the respective state. This being the first year of the current version of the scheme, the requirements of reforms and actions has been kept less onerous, with the bar raised for future years,
12 | CCAI Monthly Newslette January 2022
pushing the states towards higher level reforms, a release stated. Under the scheme, the states may commit to reforms and be eligible for increased borrowing space of ~Rs. 80,000 Crores. This scheme adopts a novel approach to incentivize the states, to commit to reforms and in turn, take benefit in the form of availability of enhanced financial resources, it added further. Almost 20 states have already shown interest in taking benefit under the scheme. Based on the recommendations of Ministry of Power in respect of such proposal from Andhra Pradesh state, Ministry of Finance had accorded their approval and the state has already availed borrowings of more than 2100 Crore, to partly utilize such allowed additional borrowing space. Proposals of Manipur and Rajasthan are also under active consideration at Ministry of Finance, both of which may be eligible
