Tamil Nadu’s gross market borrowings increased to ₹25,000 crore in the first quarter of fiscal 2023-24 from ₹8,000 crore in the same period last year, according to data from Reserve Bank of India.
After adjusting for repayments, the net borrowings stood at ₹17,000 crore in April-June 2023 period, when compared to ₹5,528 crore in April-June 2022. States, including Tamil Nadu, borrow from the market through the auction of bonds known as State Development Loans (SDL).
As per the Budget for 2023-24, the State government plans to borrow a total amount of ₹1,43,197.93 crore in 2023-24 and make repayments of ₹51,331.79 crore. The net borrowings are projected at ₹91,866.14 crore, including ₹82,625.96 crore of net open market borrowings and ₹9,240.18 crore from other sources.
The Centre has fixed a borrowing ceiling for the States. States can borrow up to 3% of their Gross State Domestic Product (GSDP) for 2023-24. An additional borrowing of 0.5% of GSDP is allowed for fulfilment of power sector reforms.
Tamil Nadu’s revenue receipts stood at ₹51,706.71 crore in the first quarter of 2023-24. The Revenue expenditure was ₹64,736.80 crore, as per the provisional figures from Comptroller and Auditor-General (CAG).
As the State’s revenue expenditure exceeded the revenue receipts, the revenue deficit for the first quarter stood at ₹13,030.09 crore. The fiscal deficit, the difference between total receipts and total expenditure, stood at ₹20,838.66 crore in the first quarter.
In the first quarter of fiscal 2024, 62.5% of Tamil Nadu’s borrowings went towards revenue expenditure, when compared to 35% in the same period last year, according to Paras Jasrai, senior analyst, India Ratings & Research.
During the pre-Covid period (1QFY16-1QFY20), 70.9% of the borrowings went towards revenue expenditure, he pointed out. Tamil Nadu’s gross borrowings so far in fiscal 2024 (till August 8) was ₹45,000 crore, compared to ₹35,500 crore in the same period last year. The State has been the top borrower so far this year.
In 2022-23, the State’s gross borrowing was ₹87,000 crore and net borrowing was ₹65,722 crore.
