Indias Newest State Takes A Whiff Of The Financial Capital

Chhattisgarh, the newest state, had its first tryst with the commercial bankers today. "As our borrowing programme is increasing, we wanted to introduce Chhattisgarh to the financial capital," said Shailesh Pathak, director institutional finance, government of Chhattisgarh.

The state government of Chhattisgarh is looking to bankers for support in the development of the state. "Our credit-deposit ratio stands at 40 per cent, which we wish to improve. We also wish to dispel the impression that Chhattisgarh is a forest country. It is a vibrant state that has the potential to become a power hub," said the state government director budget and additional commissioner commercial taxes Gaurav Dwivedi.

Chhattisgarh is entering the market on Monday with its second tranche of borrowing programme for 2002-03. The RBI has declared that it will conduct an on-tap issue for all the states for their second tranche of borrowings on August 19.

Chhattisgarh will complete more than half of its borrowing progamme, which has been identified at Rs 300 crore for the fiscal 2003. In the first tranche, the newly formed state raised Rs 52 crore, and intends to raise an additional Rs 100 crore on Monday. The Reserve Bank of India (RBI) has permitted the state to retain the excess subscription from the tap issue to the extent of 20 per cent, taking the total to around Rs 150 crore.

Chhattisgarh has not taken any overdraft from the central bank or ways and means advance (WMA) since it was incorporated on November 1, 2000, said Chhattisgarh state government additional secretary S K Misra.

State government of Chhattisgarh has given its assurance to the central government that it will bring down its revenue deficit to zero by 2004-05, and thereby be eligible for the incentive fund.

"Our revenue deficit currently stands at Rs 492 crore, accounting for 9.2 per cent of total revenue receipts," said state finance minister R C Singhdeo.