The State government has decided to depend on open market borrowings (OMBs) for the fourth quarter of the current financial year to meet its financial requirements and commitments on welfare programmes.
The government has indicated that it will raise ₹13,562 crore State development loans through auction of securities to be conducted by the Reserve Bank of India during the last quarter (January-March). The first instalment of OMB of ₹1,187 crore will be raised on January 4 through RBI’s core banking solution (e-Kuber) system.
The government, according to the indicative calendar of market borrowings by State governments or Union Territories for the quarter January-March released by the RBI, has decided to raise ₹8,000 crore in four instalments of ₹2,000 crore, in addition to ₹1,187 crore on January 4, ₹1,500 crore each on February 28 and March 15 and ₹1,375.15 crore on March 29.
The RBI said that the quantum of total market borrowings had been finalised in consultation with the State governments/Union Territories. The actual amount of borrowings and the details of the States/UTs participating would be intimated two to three days prior to the actual auction day and it would depend on the requirement of the State governments/UTs, approval from the Government of India under Article 293(3) of the Constitution of India and market conditions.
The government had been banking on OMBs from the start of the financial year to meet its commitments like revised pay scales that imposed an additional ₹10,000 crore burden annually on the exchequer, Rythu Bandhu, farmers’ investment support scheme that entailed an expenditure of over ₹15,000 crore in two instalments every year and Dalit Bandhu.
Dalit Bandhu, in particular, involving a financial grant of ₹10 lakh to each identified Dalit families across the State, would require huge amounts as the government had assured that it would provide the amount to 100 families each in the 119 Assembly constituencies spread across the State by the end of the current fiscal.
The government’s resolve to depend on OMBs is apparently borne from the fact that finances were not up to the expected levels in spite of relaxation of restrictions imposed on account of the pandemic. Though some sectors like registration and stamps, excise duties and sales tax returned to the pre-COVID levels, others like the non-tax revenue were not matching the expectations.
