The state government has decided to raise Rs 9,000 crore borrowing from the open market during the second quarter of the current financial year.
The OMBs will be mobilized during the weekly auctions conducted by the Reserve Bank of India. According to the indicative calendar released by the RBI, the state has proposed to raise ₹3,000 crore tentatively during the auction to be held on July 5. This will be followed by ₹2,000 crore and ₹1,000 crore and ₹1,000 crore and ₹2,000 crore in August. september.
RBI said the actual amount of borrowing 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 come on whether the central government has its approval for the state to borrow.
The state could not take any borrowing for two full months after the Union Finance Ministry raised questions about financial management, especially about closed budget borrowings, on which the Comptroller and Auditor General of India also raised his concerns. The state government has indicated that it will 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 were also on an ad-hoc basis in two phases after several discussions between the officials of the Union Finance Ministry and the State Government. Coming against this background, it remains to be seen whether the Center will allow the state to mobilize the anticipated resources in the coming days. The state, however, has secured the Centre’s nod to raise ₹3,000 crore on Tuesday, according to an RBI release that said the state would raise ₹3,000 crore at ₹1,000 crore each with tenures of 21, 22 and 23 years.