With the addition of Arunachal Pradesh, Chhattisgarh, Goa, Meghalaya and Tripura, the number of states that have successfully completed the 'Ease of Doing Business' reforms has reached 20, the finance ministry has said.
Those completing the 'Ease of Doing Business' reforms are eligible for additional borrowing of 0.25 percent of Gross State Domestic Product (GSDP). So far, the ministry's expenditure department has allowed these 20 states to raise additional financial resources of Rs 39,521 crore through open market borrowings.
The Ease of Doing Business is an important indicator of the investment friendly business climate in the country. Improvements in it enables faster future growth.
Therefore, the Centre in May 2020 had decided to link grant of additional borrowing permissions to states undertaking the 'Ease of Doing Business' reforms.
The reforms are completion of the first assessment of 'District Level Business Reform Action Plan'; elimination of the requirements of renewal of registration certificates/approvals/licences obtained by businesses; and implementation of computerised central random inspection system.
In view of the resource requirement to meet the challenges posed by the COVID-19 pandemic, the Centre on May 17, 2020, had enhanced the borrowing limit of the states by 2 per cent of GSDP. Half of this special dispensation was linked to undertaking citizen-centric reforms by the states.
The four citizen centric areas for reforms are implementation of One Nation One Ration Card System, Ease of Doing Business Reform, urban local body/utility reforms; and power sector reforms.