MP starts DBT in power, allowed to borrow Rs 1,423 cr more

New Delhi, Jan 19 : Giving power sector reforms a fresh ‘leg up’, Madhya Pradesh has started Direct Benefit Transfer (DBT) of electricity subsidy to farmers in a single district of the state from December 2020.
Therefore, the state has successfully implemented one out of the three stipulated reforms in the power sector.
The reforms stipulated by the Finance Ministry has made the state eligible to mobilise additional financial resources equivalent to 0.15 per cent of its Gross State Domestic Product (GSDP).
Accordingly, the Department of Expenditure has granted permission to the state to mobilise additional financial resources of Rs 1,423 crore through Open Market Borrowings. This has provided the much needed additional financial resources to the state to fight the Covid-19 pandemic.
The power sector reforms stipulated by the Finance Ministry are aimed at creating a transparent and hassle-free provision of power subsidy to farmers and prevent leakages. They also aim at improving the health of power distribution companies by alleviating their liquidity stress in a sustainable manner.
As per the guidelines issued by the Department of Expenditure, the states undertaking reforms in the power sector are granted permission to raise additional financial resources of up to 0.25 per cent of the GSDP.