Aatmanirbhar Bharat package to cope up with the challenges of public finance announces PM Modi
States were granted approval for aggregate borrowing in 2020-21 which has exhibited a significant improvement in the availability of resources to handle the crises of public finance during the covid-19 situation. In the financial year 2021, many states having sound economic policies also have obtained an additional Rs 1.06 L crore, specified by the centre to lend the sum to 23 States.
Prime Minister Narendra Modi, disclosed this in a blog on LinkedIn, this Tuesday, and this was the reply to the criticism the Central Government faced by the opposition ruled States.
Under the Aatmanirbhar Bharat package in May 2020, the central government declared openly that the states will be furnished with an enhanced borrowing of 2 per cent of GSDP which is around Rs 4.28 L Crore, in 2020-2021.
In the financial year 2022, the centre has imposed the borrowing limit for States to 4% of GSDP including 50 basis points that are linked to CAPEX goals. The PM further stated that this Aatmanirbhar Bharat package is a “new model of reforms by conviction and incentives”.
The states were allowed excess funds only on fulfilment of four reforms, they are as follows:-
- One nation one ration card system, which will benefit the migrant labourers to fetch subsidized food grain anywhere in the country.
- Business licences are to be automatically renewed online in a non-discretionary manner.
- Property taxes and fees to be charged on utilities like water to strengthen revenues of urban local bodies.
- Power sector reforms instead of free electricity to farmers will stimulate the State Power distribution firm’s finances.