20 States implement ease of doing business reforms; Get additional borrowing permission of Rs. 39,521 crore

New Delhi: The number of States who have successfully completed the “Ease of Doing Business” reforms has reached to twenty. Five more States namely, Arunachal Pradesh, Chhattisgarh, Goa, Meghalaya and Tripura have completed the “Ease of Doing Business” reforms stipulated by the Department of Expenditure.

States completing Ease of Doing Business reforms are eligible for addtional borrowing of 0.25 percent of Gross State Domestic Product (GSDP). Accordingly, on receipt of recommendations from the Department for Promotion of Industry and Internal Trade (DPIIT), the Department of Expenditure has granted permission to these 20 States to raise additional financial resources of Rs.39,521 crore through Open Market Borrowings. State wise amount of the additional borrowing permitted to these 20 States is annexed.

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 government of India had 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:

(i)      Completion of first assessment of ‘District Level Business Reform Action Plan’

(ii)     Elimination of the requirements of renewal of registration certificates/approvals/licences obtained by businesses under various Acts.

(iii)    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 inspection.

In view of the resource requirement to meet the challenges posed by the COVID-19 pandemic, the Government of India had on 17^th May, 2020 enhanced the borrowing limit of the States by 2 percent 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 (a) Implementation of One Nation One Ration Card System, (b) Ease of doing business reform, (c) Urban Local body/ utility reforms and (d) Power Sector reforms.

Annexure

State wise additional borrowing permitted for completion of Ease of Doing Business Reforms