Parliament Question: Performance Linked Additional Borrowing Facility to States

GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF EXPENDITURE LOK SABHA UNSTARRED QUESTION NO. 3497 TO BE ANSWERED ON MONDAY, 10th AUGUST, 2026 SHRAVANA 19, 1948 (SAKA) PERFORMANCE LINKED ADDITIONAL BORROWING FACILITY TO STATES 3497. Adv K. Francis George Will the Minister of Finance be pleased to state: (a) whether the 15th Finance Commission had proposed an Award for Excellence in power sector management to states, amounting to excess borrowing limit of 0.5 per cent of Gross Domestic Product (GDP) from 2021-22 to 2024-25, if so, the details of such facility granted, State-wise; (b) whether the Ministry of Power had recommended to extend this facility up to 2029-30, if so, the steps taken by the Government in this regard; and (c) whether the Government proposes to extend the excess borrowing limit of 0.5 per cent up to 2029-30 for the State of Kerala, considering the various power sector projects being undertaken by the Government of Kerala, such as the installation of smart meters and upgradation of distribution lines? ANSWER MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY) (a) Yes, the 15th Finance Commission had recommended for providing an additional annual borrowing space to the States equivalent to 0.50 per cent of their Gross State Domestic Product (GSDP) for each of the first four years of its award period, i.e., from Financial Year (FY) 2021- 22 to 2024-25, based on specified performance criteria in the power sector. Pending the submission of the report of the 16th Finance Commission, this facility was continued during FY 2025-26. The State-wise details of additional borrowings allowed for performance in power sector from FY 2021-22 to 2025-26 are given in the Annexure. (b) & (c) Yes, a request had been received from the Ministry of Power for extension of the additional borrowing facility linked to power sector reforms, which was duly replied vide D.O. letter dated 12.05.2026. The 16th Finance Commission has submitted its report, which has been duly accepted. The Commission has not recommended continuation of the additional borrowing facility linked to power sector reforms. Therefore, at present, there is no proposal under consideration for extension of additional borrowing facility for power sector reforms to State Governments including Kerala. *****Annexure referred to in the answer of part (a) of Lok Sabha Unstarred question no. 3497 for 10.08.2026 Details of additional borrowings allowed for performance in power sector to the all States from FY 2021-22 to 2025-26 (Rs. in crore) Sl. Name of State 2021-22 2022-23 2023-24 2024-25 2025-26 Total No. 1 Andhra Pradesh 3,716 5,858 6,709 7,986 6,886 31,155 2 Arunachal Pradesh - - - - - - 3 Assam 1,886 2,473 2,702 1,573 - 8,634 4 Bihar - - - - - - 5 Chhattisgarh - - - - - - 6 Goa - - - - - - 7 Gujarat - - - - - - 8 Haryana - - - - - - 9 Himachal Pradesh 251 - - - 564 815 10 Jharkhand - - - - - - 11 Karnataka - - - - - - 12 Kerala 4,060 4,263 4,866 6,149 5,848 25,186 13 Madhya Pradesh - - - - - - 14 Maharashtra - - - - - - 15 Manipur 180 213 - - - 393 16 Meghalaya 192 - - - - 192 17 Mizoram - - - - - - 18 Nagaland - - - - - - 19 Odisha 2,725 - - - - 2,725 20 Punjab - - - 3,952 1,578 5,530 21 Rajasthan 5,186 6,122 7,996 7,088 5,002 31,394 22 Sikkim 191 170 156 262 102 881 23 Tamil Nadu 7,054 5,775 9,656 9,589 6,790 38,864 24 Telangana - - - - - - 25 Tripura - - - - - - 26 Uttar Pradesh 6,823 - - - - 6,823 27 Uttarakhand - - - - - - 28 West Bengal 6,911 8,352 7,276 - - 22,539 Total 39,175 33,226 39,361 36,599 26,770 1,75,131