FinMin allows Rajasthan to borrow Rs 2,731 crore more post ease of doing business reform

NEW DELHI: The Finance Ministry on Saturday said it has permitted Rajasthan to borrow an additional Rs 2,731 crore after the state successfully undertook ease of doing business reforms.

Rajasthan has now joined the five other states namely, Andhra Pradesh, Karnataka, Madhya Pradesh, Tamil Nadu and Telangana, which have completed the reform facilitating ease of doing business to be eligible for additional borrowing. These six states have been granted additional borrowing permission of Rs 19,459 crore.

"Thus, the state (Rajasthan) has become eligible to mobilise additional financial resources of Rs 2,731 crore through open market borrowings. Permission for the same was issued by the Department of Expenditure on December 24," the ministry said in a statement.


The ease of doing business is an important indicator of the investment friendly business climate in the country. The government had in May 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 include completion of 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.

In view of the resource requirement to meet the challenges posed by the COVID-19 pandemic, the government had in May enhanced the borrowing limit of the states by 2 per cent of their GSDP. Half of this special dispensation was linked to the states undertaking citizen centric reforms -- 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', six states have done ease of doing business reforms, and two states have done local body reforms.

Total additional borrowing permission issued so far to the states, which have done the reforms, is Rs 50,253 crore, the ministry added.