States get nod to borrow Rs 60,876.80 crore more for contribution to NPS
- IBJ Bureau
- Dec 20, 2023
The Department of Expenditure, under the Ministry of Finance, on Tuesday approved an extra borrowing ceiling of over Rs 60,876.80 crore to 22 States in 2023-24 for contribution to the National Pension System (NPS). According to the announcement, this will be over and above the net borrowing ceiling for 2023-24.
The normal net borrowing ceiling for States has been fixed at 3 per cent of their Gross State Domestic Product (GSDP). The GSDP currently stands at Rs 8.59 lakh crore. The ministry also issued approval for raising Rs 6.99 lakh crore for open market borrowing and Rs 69,370.81 crore for availing themselves of negotiated loans during 2023-24.
According to the announcement on social media platform X, the Finance Ministry has also allowed extra borrowing ceilings to States equivalent to employer and employee share of contribution of its employees over and above the 3 per cent ceiling.
Earlier in June, the Centre had approved additional financial incentives worth Rs 66,413 crore to 12 States for power sector reforms.
The Union Finance Minister had announced the initiative in the Union Budget 2021-22. Under this initiative, an additional borrowing space of up to 0.5 per cent of the GSDP is available to States annually for a four-year period from 2021-22 to 2024-25.