Indian states were able to raise an additional Rs 1.06 lakh crore in fiscal year 2020-21 amid the COVID-19 pandemic due to the central-state partnership, and the boost from the Union government to states to raise additional resources on condition that they undertake reforms, said Prime Minister Narendra Modi.

Claiming that mobilizing enough resources for public welfare while ensuring sustainability is proving to be one of the biggest challenges due to the pandemic, PM Modi, in a blog post on LinkedIn, said he There was a significant increase in the availability of resources for states due to the central state. bhagidari or partnership.

The Prime Minister took to Twitter to share the post he wrote on LinkedIn.

Reforms by conviction and incentives … my @LinkedIn publication on innovative policymaking in the era of COVID-19, fueled by the spirit of the state of the Bhagidari Center. https://t.co/ac0jhAqluT

– Narendra Modi (@narendramodi) June 22, 2021

When formulating the economic response to the COVID-19 pandemic, the government wanted to ensure that solutions do not follow a “one size fits all” model. “For a federal country with continental dimensions, finding political instruments at the national level to promote reforms by state governments is indeed a challenge. But, we were confident in the robustness of our federal regime and we moved forward in the spirit of the Bhagidari center-state, ”Modi said.

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As part of the Aatmanirbhar Bharat package, announced in May last year, the Center allowed states to borrow an additional amount of up to 2% of their national gross domestic product (GNP), of which 1% was subordinated to the implementation of certain economic reforms.

“This reform boost is rare in Indian public finances. It was a boost, prompting states to adopt progressive policies to free up additional funds. for sound economic policies ”, wrote the Prime Minister.

The four reforms – the implementation of the One Nation One Ration Card, the ease of doing business, the reforms of urban local bodies, and the reforms of the electricity sector – were linked to improving the “ease of doing business”. of life ”for the public and in particular the and the middle class, Modi said.

In addition, the reforms have also promoted fiscal sustainability.

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While 17 states were granted additional loans amounting to Rs 37,600 crore for completing the One Nation One Ration Card reform, 20 states were allowed to borrow an additional Rs 39,521 crore to undertake reforms aimed at improve the “ease of doing business”.

Claiming that the urban body reforms would benefit the urban poor and the middle class, the prime minister said 11 states had secured an additional loan of Rs.15,957 crore to undertake the reforms.

Regarding electricity sector reforms, Modi said that “13 states have implemented at least one component, while 6 states have implemented the DBT (direct benefit transfer) component. As a result, 13,201 crore rupees of additional borrowing was authorized.

Various programs and reforms have remained inoperative often for years for various reasons, however, the Center and the States have come together to roll out pro-public reforms in a short period of time amid the pandemic, the prime minister said.

“India has seen a model of ‘reforms by stealth and compulsion.’ This is a new model of ‘reforms by conviction and inducement’,” Modi said, adding that the Center and states would continue. to work together for rapid progress of 130 Indian crore.

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