The State government has decided to raise open market borrowings of ₹9,000 crore during the second quarter of the current financial year.
The OMBs will be raised during the weekly auctions conducted by the Reserve Bank of India. According to the indicative calendar released by the RBI, the State proposed to tentatively raise ₹3,000 crore during the auction slated on July 5. This would be followed by ₹2,000 crore and ₹1,000 crore in August and ₹1,000 crore and ₹2,000 crore in September.
The RBI said the actual amount of borrowings would depend on the requirement of the State Governments/Union Territories, “approval from the Government of India under Article 293(3) of the Constitution of India” and market conditions. Interestingly, the indicative calendar comes at a time when clarity is yet to emerge on whether the Central Government have its nod for the State to raise borrowings.
The State could not raise any borrowings for two full months after the Union Finance Ministry raised queries about the financial management especially off budget borrowings on which the Comptroller and Auditor General of India too had raised its concerns. The State government has indicated that it would raise ₹15,000 crore during the just-concluded first quarter but could raise only ₹7,000 crore, ₹4,000 crore on June 7 and ₹3,000 crore on June 28.
The OMBs in the two tranches too were on ad hoc basis after a series of discussions between the Union Finance Ministry’s officials and the State government. Coming in this background, it has to be seen whether the Centre would allow the State to raise the resources as projected in the coming days. The State however appears to have secured the Centre’s nod for raising ₹3,000 crore on Tuesday going by the RBI’s release which said the State would raise ₹3,000 crore at ₹1,000 crore each with a tenure of 21, 22 and 23 years.
