The State Government has decided to go ahead with raising the open market borrowings through the Reserve Bank of India notwithstanding the reported restrictions imposed by the Union Finance Ministry on the quantum of borrowings.
The Finance department has mobilised ₹4,000 crore OMBs during the two auction of securities conducted by the RBI on July 5 and 12 and the State is gearing up to file indents for further borrowings in the coming days. According to the indicative calendar of the RBI, the State proposed to tentatively raise ₹3,000 crore during the auction slated on July 5. This would be followed by ₹2,000 crore and ₹1,000 crore in August and ₹1,000 crore and ₹2,000 crore in September.
The State however raised ₹1,000 crore on July 12 as against the ₹3,000 crore projected during the current month. The amount has come handy for the State to complete payment of the first instalment of Rythu Bandhu, farmers investment support scheme, amounting to close to ₹7,500 crore without any impediments.
“We are going ahead,” was how a senior Finance official responded when asked whether the State is filing its indent for next round of auction of securities by RBI. The official however did not reply when asked whether the Union Finance Ministry has given its consent to the State to raise OMBs as projected in the current year’s budget.
The development assumes significance as the Union Ministry had reportedly cut down market borrowings of the State by close to ₹19,000 crore claiming that the quantum of amounts raised in the name of corporations could be included in the quantum of borrowings raised by the State under the Fiscal Responsibility and Budget Management Act stipulations.
The official however asserted that the quantum of reduction was not officially communicated to the State yet and the reports about cutting down the OMBs by ₹19,000 crore was “guesstimate”. The State could borrow just ₹7,000 crore during the first quarter as against the projected ₹15,000 crore because of the restrictions imposed by the Union Finance Ministry. The amount raised too was on ad hoc basis with the Centre yet to give its nod for raising the projected quantum of borrowings.
