Telangana completes urban local bodies reforms; gets nod for Rs 2,508 cr additional borrowings

The government granted additional borrowing permission of Rs 2,508 crore to Telangana for completing the urban local body (ULB) reforms, a finance ministry statement said on Thursday.

This makes Telangana the third state after Andhra Pradesh and Madhya Pradesh to achieve the ULB reforms, taking the total additional borrowing granted to them to Rs 7,406 crore.

In May, as part of the first tranche of announcements made regarding the Atmanirbhar Bharat package, the Centre had permitted states an additional borrowing limit of 2% of gross state domestic product in order to meet the pandemic and lockdown related expenditures.


The government had kept 1% of this additional borrowing conditional to the states achieving reforms in four broad areas with 0.25% of the additional limit reserved for each sector.

These included implementing the One Nation One Ration Card System (ONORCS), ease of doing business reforms and power sector reforms apart from the ULB.

So far, ten states have implemented the ONORCS while seven states have implemented the ease of doing business reforms, apart from the three that completed the ULB reforms.

Together, these states have unlocked additional borrowing limits amounting to Rs 54,190 crore, the ministry said.

On the same day, the finance ministry also released Rs 6,195 crore to 14 states as the tenth equated monthly installment of post devolution revenue deficit grant as recommended by the 15th Finance Commission, finance minister Nirmala Sitharaman’s office said via a Twitter update.