AP allowed to borrow more for Power reforms

The central government has now officially granted permission for the Andhra Pradesh government to borrow more money, for power reforms in the state. The Ministry of Finance on Friday granted additional borrowing permission to Andhra Pradesh and other states, for undertaking stipulated reforms in the power sector.

Andhra Pradesh has been allowed to borrow Rs. 2,123 crore, as per the recommendation of the 15th Finance Commission, and even Rajasthan has been given the same permission. Apart from Rajasthan and Andhra Pradesh, nine other states — Assam, Goa, Kerala, Manipur, Meghalaya, Odisha, Sikkim, Tamil Nadu and Uttar Pradesh — have also submitted their proposals to the Ministry of Power, which are currently under examination. The Ministry of Finance decided to grant additional borrowing space of up to 0.5% of the Gross State Domestic Product (GSDP) to the states every year for a four-year period from 2021-22 to 2024-25 based on the reforms undertaken by the states in the power sector, and this was announced by finance minister Nirmala Sitaraman in her budget speech for the year of 2021-22.

Once the reforms have been undertaken by a state, its performance is evaluated on the basis of percentage of metered electricity consumption against total energy consumption, including agricultural connections, subsidy payment by direct benefit transfer (DBT) to consumers, payment of electricity bills by the government departments and local bodies, installation of prepaid meters in government offices and use of innovations and innovative technologies.