By TIOL News Service

NEW DELHI, DEC 09, 2020: IN view of the challenges posed by the COVID-19 pandemic for mobilisation of financial resources, India today strengthened the hands of states by including a grant of additional borrowing permission of 2% of the gross state domestic product (GSDP).

The grants has enabled the states to mobilise additional financial resources to fight the pandemic and maintain the standards of service delivery to the public. owever, to ensure long-term debt sustainability and prevent any adverse impact on future, a part of the additional borrowing was linked to the states carrying out reforms in the sectors critical for service delivery to the citizens.

One of the sectors identified for reforms is the Public Distribution System (PDS).

Out of the additional borrowing limit of 2% of GSDP, 0.25% is linked to implementation of the One Nation One Ration Card system. This was aimed to ensure that the beneficiaries under the National Food Security Act (NFSA) and other welfare schemes, especially the migrant workers and their families, get ration from any Fair Price Shop (FPS) across the country.

Other aims of the intended reform were to better target beneficiaries, elimination of ineligible ration cards and thus enhance welfare and reduce leakage.

So far nine states have successfully completed reforms in the PDS and implemented the system - Andhra Pradesh, Goa, Haryana, Karnataka, Kerala, Telangana, Tripura and Uttar Pradesh.

On completion of reforms before 31 December, additional borrowing permission of Rs 23,523 crore has been issued to the states.

In addition to the One Nation One Ration Card, other reforms specified as a precondition to avail additional borrowing are ease of doing business, urban local body and utility reforms and power sector reforms.