Odisha to raise Rs 700 crore from securities sale

RBI would conduct the auctions on its core banking solutions platform on June 28

The state government has notified the sale of government securities of 15-year tenure. The government hopes to mop up Rs 700 crore through the securities sale. The loan proceeds would be used for financing capital projects as the state government is emphasising on raising the level of capital expenditure.

The government stock would be sold through the Reserve Bank of India (RBI). The central bank would conduct the auctions on its core banking solutions platform on June 28. The auction results would be displayed on the RBI website on the same day.

The government stock up to 10% of the notified amount of the sale would be allotted to eligible individuals and institutions subject to a maximum limit of 1% of the notified amount for a single bid, according to the revised scheme for non-competitive bidding facility in the auctions of state government securities of the general notification.

 

The investment in government stock would be reckoned as an eligible investment in government securities by banks for the purpose of Statutory Liquidity Ratio under Section 24 of the Banking Regulation Act, 1949.

In its 2016-17 Budget, the state government has pegged its gross borrowing at Rs 15,014.10 crore, which includes the net market borrowing of Rs 7,323.75 crore. The state's overall debt stock for 2016-17 has been estimated at Rs 64,991.83 crore, 16.96% of the GSDP (Rs 3.83 lakh crore) and within the limit of 25% prescribed by Odisha Fiscal Responsibility and Budget Management Act, 2005.

Capital outlay has been proposed to be enhanced to Rs 16,749.70 crore, about 4.37% of the GSDP.