Centre lets states borrow more, asks for reforms

Although states have tapped only 14% of the permitted borrowings for the current financial year, in 2020-21, their loans can be up to 5% of the gross state domestic product (GSDP), instead of the permitted 3%. This is expected to help them raise an additional Rs 4.3 lakh crore this year, finance minister Nirmala Sitharaman said, adding that like states, the Centre too had seen its revenue decline due to Covid-19.