Centre to get around states by raising borrowing limit
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New Delhi: In an apparent move to tame the states over its privatization drive, the Centre raised the states borrowing limit from 3 to 5 percent.
Availing more loan means states will have to approve of the centre’s reform directives.
States will be allowed to take more loan by rating on their implementing the Centre’s directives including privatisation of power distribution, ease of doing business and one nation one ration card, among others.
With the borrowing limit raised, Kerala would be able take 18,000 crore more, provided that Kerala will have to approve the directives.
Finance minister Nirmala Sitharaman said that conditions were laid down to ensure that loan was used for the poor.
She blamed the states for not fully utilizing the funds. However the minister didn’t say when the states would get GST arrears.