With more stipulations to adopt several reforms, it seems to be difficult for the State Government to opt for additional market borrowing in midst of Novel Corona Virus (COVID-19) Pandemic.
While State Government has been undertaking several reforms on continuous basis, asking the State during COVID-19 Pandemic for adopting more reforms for availing additional credit, pose difficult scenario, officials feel.
Centre has asked to go for four types of reforms before going for market borrowings at an elevated level. Union Government has allowed borrowing additional 2.0 Percent of State’s Gross Domestic Product (GSDP).
If the State Government will take up various reforms it will be able to go for an additional Rs.12,000 Crore as the States’ GSDP is around Rs.6 Lakh Crore.
While the Central Government has allowed states to raise Rs 3.2 lakh crore in net market borrowings in the first nine months of the ongoing financial year, the State Governments are finding it difficult to opt for more reforms at an early date as they are under high stress due to COVID-19 Pandemic, officials say.
As per Central Orders, the States will be able to raise 50 percent of the increased net borrowing limit in April-December, with stipulation of undertaking various reforms.
Union Government providing such cushioning has said that “If there’s a need to borrow more in the first nine months of the current financial year, as is anticipated due to the fallout of Covid-19, the centre will process requests to increase open market borrowing during the period”, official notification said.
Union Government has said that the state Government will have to implement ‘One Nation One Ration Card’ System and date line is 31 December, 2020.
Secondly, the State will have to do Ease of Doing Business (EoDB) comprehensively so that Industry and Business will have smooth sail.
While Odisha Government has taken up EoDB in various sectors, but more steps are required and those are to be implemented to avail additional market borrowings.
Those are stipulated by Department of Promotion of Industry and Internal Trade (DPIIT).
While EoDB has been implemented in State Level, DPIIT has asked for reforms at District level and Reform Action Plan to be implemented.
DPIIT has circulated several list of certificates for which renewal are not to be insisted upon.
Centre has also asked for implementation Centralized Random Inspection System, which is needed to be implemented in a time bound manner.
Major Reforms asked is reduction of Aggregate Technical and Commercial (AT&C) loss in Power Sector.
As Power Distribution Companies (DISCOM)s are not able to infuse more funds in system improvement, AT&C loss is continuing and it is a serious problem.
Reforms in Urban Local Bodies, including going for elections and electing the people’s representatives, notifying rates of property tax and user charges for various services in Urban Local Bodies are warranted.
While the State Government is fighting COVID-19 and facing natural disasters like Amphan, going for reforms at this juncture seems difficult, admit a senior officer.