Longer tenure bonds (more than 10 years) accounted for 48% of Tamil Nadu’s borrowing mix in fiscal 2022, when compared to nil borrowing in longer dated bonds in FY2018, according to ratings firm ICRA Ltd.
To bridge the gap between income and expenditure or, in other words, fiscal deficit, States including Tamil Nadu borrow from the market through the issue of bonds called State Development Loans (SDLs). In fiscal 2022, the Tamil Nadu government borrowed ₹87,000 crore. ICRA estimates the stock of Tamil Nadu’s SDLs to be at ₹4.7 lakh crore as on March 31, 2022. Of this, relatively large redemptions exceeding ₹48,000 crore are due in FY2028 and FY2031, it noted.
