States can borrow Rs 3.2 trillion in April-Dec after discussions with RBI

The Centre has allowed states to borrow 50 per cent of their 2020-21 combined borrowing limit in April-December, according to a finance ministry letter to the Reserve Bank of India (RBI).
 

The letter was put up on the expenditure department’s website on Tuesday.
 

The amount that the states have been given permission to raise through open market borrowings is a little more than Rs 3.2 trillion. “It has been decided to accord consent to the state governments to raise open market borrowing on the basis of 50 per cent of the net borrowing ceiling fixed for 2020-21. The consent is applicable for the first nine months of 2020-21,” the letter said.
 

It stated that the RBI will decide with states on the details of the borrowings, and further consent on raising borrowings will be processed on receiving further information from the states. The states can avail of this window at any time between April and December, after discussions with the RBI.