Andhra, Rajasthan allowed extra borrowings of Rs 7,309 crore

The Centre has allowed additional borrowing of Rs 7,309 crore to Rajasthan and Andhra Pradesh for undertaking power sector reforms.

"While Rajasthan has been allowed to borrow additional Rs 5,186 crore, Andhra Pradesh has been allowed to borrow additional Rs 2,123 crore as incentive to embark on the reform process," finance ministry said in a statement on Friday.

So far 11 states have claimed additional borrowing based on reforms undertaken in power sector.


The finance ministry added that proposal from nine other states including Assam, Goa, Kerala, Manipur, Meghalaya, Odisha, Sikkim, Tamil Nadu and Uttar Pradesh are also under examination.

Centre claims this will make additional resources of more than Rs 1 lakh crore available to states every year till FY 2025, while improving the functioning of power sector.

On the recommendations of the Fifteenth Finance Commission, Centre grant additional borrowing of up to 0.5% of the Gross State Domestic Product (GSDP) to the states for facilitating power sector reforms. States are also eligible for bonus marks for privatisation of the power distribution companies.