Twenty-three states in India were able to raise additional borrowings of Rs 1.06 lakh crore in 2020-21 through the implementation of a set of reforms introduced by the Centre, wrote Prime Minister Narendra Modi on Tuesday, 22 June, in a blog titled 'Reforms by Conviction and Incentives'.
“This was made possible due to our approach of Sabka Saath, Sabka Vikas and Sabka Vishwas,” wrote the Prime Minister.
In May 2020, the Centre had announced that states would be allowed enhanced borrowing for 2020-21 as part of the Aatmanirbhar Bharat (Self-Reliant India) package.
An extra 2 percent of Gross Domestic Product (GDP) of states was allowed, of which 1 percent was conditional to the implementation of certain economic reforms.
“This (extra GDP) was a nudge, incentivising the states to adopt progressive policies to avail additional funds. The results of this exercise are not only encouraging but also run contrary to the notion that there are limited takers for sound economic policies.”Prime Minister Narendra Modi
‘Reforms by Conviction and Incentives’: PM Modi
PM Modi wrote that each of the reforms is linked to improving the ease of living to the public, particularly the poor, the vulnerable, and the middle class, and promote fiscal sustainability.
The first reform under the 'One Nation One Ration Card' policy required states to ensure that all ration cards in the state under the National Food Security Act (NFSA) were linked to Aadhaar cards of all family members.
The second reform, aimed at improving ease of doing business, required states to ensure that renewal of business-related licences under seven Acts is made automatic, online, and non-discretionary on mere payment of fees.
“This reform (covering 19 laws) is of particular help to micro and small enterprises, who suffer the most from the burden of the ‘inspector raj’. Twenty states completed this reform and were allowed additional borrowing of Rs 39,521 crore.”Prime Minister Narendra Modi
“The third reform required states to notify floor rates of property tax and of water and sewerage charges, in consonance with stamp duty guideline values for property transactions and current costs respectively, in urban areas. This would enable better quality of services to the urban poor and middle class, support better infrastructure and stimulate growth,” he wrote.
The fourth reform was the introduction of Direct Benefit Transfer (DBT) in lieu of free electricity supply to farmers.
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