Andhra, UP get additional borrowing permission for PDS, EoDB reforms

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New Delhi (NVI): Andhra Pradesh and Uttar Pradesh have been granted additional borrowing permission from the Ministry of Finance for undertaking reforms in the public distribution system (PDS) and Ease of Doing Business.

This will make an additional amount of Rs 7,106 crore available to these states, the Ministry of Finance said in an official statement.

Uttar Pradesh has now become the sixth state to complete the reform process in PDS to implement One Nation One Ration Card System, the ministry said. This has made the state eligible to raise an amount of Rs 4,851 crore through Open Market Borrowings (OMBs). This amount will help the state in mobilizing additional financial resources required to fight COVID-19.

On the other hand, Andhra Pradesh became the first state in the country to successfully undertake “Ease of Doing Business” reforms and has thus become eligible to raise an additional amount of Rs 2,525 crore through Open Market Borrowings.

Earlier, Andhra Pradesh had also completed PDS reforms to enable One Nation One Ration Card System.

One Nation One Ration Card System ensures availability of ration to beneficiaries under the National Food Security Act (NFSA) and other welfare schemes, especially to the migrant workers and their families, at any Fair Price Shop (FPS) across the country, the statement read.

It also enables better targeting of beneficiaries, elimination of bogus or duplicate or ineligible cardholders. Thus, One Nation One Ration Card enhances welfare and reduces leakage.

Moreover, the Department of Food and Public Distribution is the nodal Ministry to assess reform claims of the states and recommend the release of an additional borrowing limit of 0.25 percent of GSDP.

The department has confirmed that the States of Uttar Pradesh, Andhra Pradesh, Telangana, Goa, Karnataka and Tripura have successfully carried out aforesaid reforms in PDS and implemented One Nation One Ration Card System.

“Ease of Doing Business (EoDB) is an important indicator of an investment-friendly business climate in the country. Improvement in the ease of doing business will enable faster future growth of the state economy,” the ministry said.

Therefore, to incentivize implementation of district level and licensing reforms for EoDB, an additional borrowing facility of 0.25 per cent of GSDP has been allowed to states on the recommendation of the Department for Promotion of Industry and Internal Trade (DPIIT).

However, the reform envisages undertaking all of the following actions by the state governments.

The state will complete the first assessment of ‘District Level Business Reform Action Plan’ as intimated by DPIIT. They will eliminate the requirements of renewal of certificates/ approvals/ licences obtained by businesses for various activities from the authorities at the State level as per list circulated by DPIIT.

In addition to this, collection of reasonable fees with automatic non-discretionary deemed renewal will also be permissible as reform if done in a transparent online, non-discretionary & automatic manner.

The state will also implement a computerized central random inspection system under the Acts as per list circulated by DPIIT and inspection report is uploaded within 48 hours of inspection.

Earlier in May, the Centre had allowed additional borrowing limit of up to 2 percent of Gross State Domestic Product (GSDP) to the States for the year 2020-21. This made an amount up to Rs 4,27,302 crore available to the States, the ministry noted.

“One percent of this is subject to implementation of following four specific state level reforms, where weightage of each reform is 0.25 percent of GSDP. They are implementation of One Nation One Ration Card System, ease of doing business reform, urban local body/ utility reforms and power sector reforms,” it added.