Borrowing by States increase 45% this fiscal

11 States raise ₹14,298 cr. via auction

Eleven States raised a total of ₹14,298 crore at the auction of State government securities or State development loans (SDLs) held on Tuesday.

This is ₹1,500 crore more than the notified amount of the auction as Maharashtra and Gujarat had accepted an additional ₹1,000 crore and ₹500 crore respectively, CARE Ratings said in a report based on RBI data.

From April 7 to September 22 in this financial year, 27 States and 2 Union Territories have cumulatively raised ₹3.26 lakh crore via market borrowings, which is a 45% increase from the borrowings in the corresponding period of 2019-20.

Having faced a sharp decline in revenues, State governments have been increasingly resorting to market borrowings. Barring the seven States of Arunachal Pradesh, Tripura, Manipur, Punjab, Uttar Pradesh, Himachal Pradesh and Jharkhand, the borrowings of all the other States have seen a notable increase from year ago, CARE said.

Tamil Nadu, Maharashtra, Andhra Pradesh, Karnataka and Rajasthan have been the top 5 borrowing States, accounting for 54% of total borrowings by States so far. Karnataka, Maharashtra and T.N. have seen their market borrowings increase by more than 100% from the year earlier period.

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