New Delhi (NVI): Kerala has become the 8th state to successfully complete the ‘Ease of Doing Business’ reform stipulated by the Ministry of Finance.
With this, the state has become eligible to get additional financial assistance worth Rs 2,373 crore through open market borrowings.
“Kerala has now joined the other seven states namely Andhra Pradesh, Karnataka, Madhya Pradesh, Odisha, Rajasthan, Tamil Nadu and Telangana, who have also completed this reform,” the Ministry of Finance said in a statement.
On completion of reforms facilitating ease of doing business, these eight states have been granted additional borrowing permission of total Rs 23,149 crore, it added.
Notably, the ease of doing business is an important indicator of the investment friendly business climate in the country and improvements in the ease of doing business will enable faster future growth of the state economy, the ministry said
Therefore, the government in May last year decided to link grant of additional borrowing permissions to states who undertake the reforms to facilitate ease of doing business.
The reforms stipulated by the Department of Expenditure under in this category includes completion of first assessment of ‘District Level Business Reform Action Plan’ and removal of the need to renew or approve registration certificates or licences obtained by businesses under various Acts
Also, implementation of computerised ‘central random inspection system’ under the Acts wherein allocation of inspectors is done centrally.
Earlier on May 17, 2020, in view of the resource requirement to meet the challenges posed by the COVID-19 pandemic, the Centre enhanced the borrowing limit of the states by 2 percent of their GSDP.
“Half of this special dispensation was linked to undertaking citizen centric reforms by the states,” the statement said.
These four citizen-centric areas for reforms are implementation of one nation one ration card system, ease of doing business reform, and urban local body or utility and power sector reforms.
So far, 10 States have implemented the One Nation One Ration Card System, 8 States have done ease of doing business reforms, and 4 States have done local body reforms.
“Total additional borrowing permission issued so far to the states who have done the reform stands at Rs 56,526 crore,” the ministry added.