24.2 C
New York
Wednesday, August 17, 2022

Tamil Nadu to raise ₹2,000 crore on May 31- Mrit News

- Advertisement -

The Tamil Nadu government on Thursday said it would raise ₹2,000 crore through sale of 10-year bonds. This will be the first market borrowing done by the State in the current fiscal year 2022-23.

The auction would be conducted by the Reserve Bank of India (RBI) on May 31, the State Finance Department said in a statement.

As per the information released by RBI, the State government had indicated that it would borrow ₹23,500 crore in the first quarter (April-June) of fiscal 2022-23. States, including Tamil Nadu, borrow from the market through auction of bonds known as State Development Loans (SDL).

The Centre has allowed States to borrow 3.5% of their Gross State Domestic Product (GSDP) in 2022-23. An additional borrowing of 0.5% of GSDP is allowed, based on fulfilment of power sector reforms and further based on their contributions into the National Pension System for government employees. Additionally, there has been a change in guidelines with respect to the Centre granting permission to States on the borrowing ceiling.

The States have to disclose the off-budget borrowings undertaken by them since 2020-21 and over-utilisation against the borrowing limits. According to the Centre, off-budget borrowings are borrowings by State Public Sector Companies, Special Purpose Vehicles among others and where the principal and/or interest are to be serviced out of the State budgets. The Centre will adjust such borrowings from this year’s borrowing ceiling.

According to ratings firm ICRA Ltd, based on the adjustments including carry forward of unutilised borrowing from previous years, the borrowing ceiling may be enhanced upward or downward for each State.

Tamil Nadu has limited off-budget borrowings, as most of the debt of State power and transport utilities are serviced through their own cash generation.

- Advertisement -

Related Articles


Please enter your comment!
Please enter your name here

Stay Connected

- Advertisement -

Latest Articles