Facing fiscal strain, the Centre's dependence on ways and means advances (WMA) rose by around 50 per cent (Rs 4,888 crore) to Rs 13,413 crore till the week ended May 25, 2001.
The outstanding WMA accounts for nearly 10 per cent of the gross government borrowing programme of Rs 1,19,770 crore for fiscal 2001-02.
The growth of WMA forced the Reserve Bank of India (RBI) to privately place the 10.25 per cent government paper maturing in 2021 for Rs 5,000 crore on May 30.
Dealers expect the central bank to conduct further auctions in the coming week. RBI traditionally conducts auctions whenever the WMA reaches near the Rs 10,000-crore mark.
Analysts view the government resorting to this level of overdraft facility in an easy liquidity environment as significant.
They pointed out that this move may be one of the ways to spur demand through increased expenditure and should be viewed against the backdrop of over 35 per cent of the government's borrowing being already completed within two months of the start of this financial year.
Loans and advances extended by the RBI to the state governments have increased by 17.67 per cent to Rs 3,794 crore in the week ended May 25 against the previous week, according to the apex bank's latest weekly statistical supplement.
During the fortnight ended May 18, 2001, non-food credit extended by scheduled commercial banks (SCBs) fell by Rs 571 crore to Rs 4,73,893 crore compared with the previous fortnight ended May 4.
In the financial year so far, non-food credit is up by Rs 4,802 crore against Rs 1,943 crore in the same period last year. On a year-on-year basis (June 2000 to May 2001), the non-food credit is up by Rs 61,683 crore against a Rs 66,821 crore growth between June 1999 and May 2000.
During the fortnight ended May 18, aggregate deposits of these banks were up by Rs 6,981 crore to Rs 9,98,299 crore over the previous fortnight. Demand deposits, however, fell by Rs 850 crore to Rs 1,43,649 crore, while time deposits rose by Rs 7,831 crore to Rs 8,54,650 crore.
In the financial year so far, aggregate deposits of SCBs jumped by 4.2 per cent to Rs 40,290 crore compared with a 2.8 per cent rise to Rs 23,160 crore in the same period last year.
Reserve money, during the week ended May 25, rose by Rs 4,237 crore to Rs 3,11,535 crore. In the financial year so far, reserve money has grown by 2.6 per cent (Rs 7,982 crore) against a 0.7 per cent growth (Rs 1,977 crore) in the same period last year.
