States, UTs to borrow Rs 4.7 trillion via govt securities in Q4FY25

States and Union Territories (UTs) plan to borrow up to Rs 4.7 trillion through state government securities in the last quarter of the current financial year, the Reserve Bank of India (RBI) said in a release on Tuesday.

 

“The actual amount of borrowings and the details of the states/UTs participating will be announced via press releases two to three days prior to the auction day and will depend on the requirements of the state governments/UTs and approval from the Government of India,” the release stated. “RBI reserves the right to modify the dates and the amount of the auction in consultation with state governments/UTs,” it added.

 

According to an RBI report, state governments have made commendable progress in fiscal consolidation by maintaining their aggregate gross fiscal deficit (GFD) within 3 per cent of gross domestic product (GDP) for three consecutive years (2021-22 to 2023-24). States also restricted their revenue deficit to 0.2 per cent of GDP in 2022-23 and 2023-24.

 

In 2023-24, states contained their GFD at 2.9 per cent of GDP, within the Fiscal Responsibility Legislation (FRL) limit of 3 per cent. For the financial year 2024-25 (FY25), states have budgeted a GFD of 3.2 per cent of GDP, a marginal increase from the previous year, with significant inter-state variations.