Reform Linked Borrowing

Why in news ? Indian states were able to borrow an extra Rs. 1.06 lakh crore in 2020-21 (FY21) due to the Reform Linked Borrowing window. This was announced to provide an additional leeway to states in order to cope with the adverse effects of Covid-19 pandemic on the economy. About: This was a nudge, incentivising the States to adopt progressive policies to avail additional funds. In October 2020, the Central government had linked permission for additional borrowing of 1% of their GSDP (Gross State Domestic Product) to implementation of four critical reforms, which are: Implementation of One Nation One Ration Card System, Ease of doing business reform, Urban Local body/....Read More