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The power ministry has said that as many as 20 states have evinced interest for getting additional borrowing space for the power sector under a central scheme. The Ministry of Finance had launched a programme in June 2021 to allow additional borrowing space of Rs 80,000 crore to states, which is conditional on them undertaking and sustaining specific reforms in the power sector.

Based on the recommendations of Ministry of Power in respect of such proposal from Andhra Pradesh state, Ministry of Finance had accorded their approval and the state has already availed borrowings of more than Rs 2100 crore, to partly utilize such allowed additional borrowing space. The proposals of Manipur and Rajasthan are also under active consideration at Ministry of Finance, both of which may be eligible for the maximum limit of 0.50 per cent increased borrowing space, based on reforms carried out by them in the power sector. Rest of the states are also submitting their proposals.

It stated under the programme, the additional borrowing limit permitted for power sector reforms is 0.5 per cent of the Gross State Domestic Product (GSDP) of the respective state. This being the first year (2021-22) of the current version of the scheme, the requirements of reforms and actions has been kept less onerous, with the bar raised for future years, pushing the states towards higher level reforms.