The arduous wait of the State Government for raising funds through open market borrowings has ended with the Union Finance Ministry reportedly granting permission to the State.
The State Government has immediately opted for raising ₹4,000 crore by way of selling stocks in the auction of securities to be conducted by the Reserve Bank of India on June 7. The new State Government stocks will bear interest at the rates determined by RBI at the auctions. The stocks will be governed by the provisions of the Government Securities Act, 2006, and the Government Securities Regulations, 2007.
Though permission had been accorded to raise OMBs, sources said the quantum of borrowings projected in the budget are unlikely to be raised. The Finance Ministry has reportedly slashed the entitlement of the State by close to 20 per cent citing the off-budget borrowings on which the Union Government had expressed concerns.
