The State government will raise ₹1,500 crore from the market through sale of 12-year bonds.
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The auction would be held on the Reserve Bank of India Core Banking Solution (EKuber) system on May 31, the State government said in a statement.
Earlier, the Centre had allowed the State to borrow ₹5,000 crore from the market to meet immediate requirements, as the borrowing schedule for the first quarter of 2022-23 was yet to be approved.
As per the new guidelines, the Centre wants off-budget borrowings by State public sector companies, corporations, special purpose vehicles, and ''other equivalent instruments'' to be factored into the State's borrowing limit.
The government said on Friday that the bonds issue was meant to mobilise funds for development activities.