States plan to borrow around Rs 2 lakh cr from markets to mobilise funds for Covid relief
Mumbai: With the pandemic pushing up the need to spend more towards Covid relief measures, states have lined up massive borrowing plan for the second quarter of current financial year.
In all, states and union territories expect to borrow Rs 1,92,091 crore from the markets during July-September quarter. The Reserve Bank of India, in consultation with the State Governments/Union Territories (UTs) has drawn up the borrowing calendar for the quarter where bonds will be issued to mobilise funds on a weekly basis.
As per the states’ borrowing calendar, Uttar Pradesh and Maharashtra, the two of the country’s largest states with higher population would have maximum borrowings of Rs 25,000 crore and Rs 22,500 crore respectively during the quarter. Bihar will also borrow in excess of Rs 12,000 crore while West Bengal will borrow about Rs 18,000 crore during the quarter.
The borrowing programme that started on July 6 will continue till September 28.
The actual amount of borrowings and the details of the States/UTs participating would be intimated by way of press releases two/three days prior to the actual auction day and would depend on the requirement of the State Governments/UTs, approval from the Government of India under Article 293(3) of the Constitution of India and the market conditions, RBI said in a statement.
RBI would endeavour to conduct the auctions in a non-disruptive manner, taking into account the market conditions and other relevant factors and distribute the borrowings evenly throughout the quarter. RBI reserves the right to modify the dates and the amount of auction in consultation with State Governments/UTs, the statement added.