Mumbai, October 6 (MExN): The cumulative market borrowing of 28 states and 2 Union Territories so far in this the current fiscal year 2020-21 (April 7- October 6) have been Rs.3.75 lakhs crore, 55% more than in the corresponding period of 2019-20 (Rs. 2.43 lakh crores), according to report by a credit rating agency in India.
Out of this, 4 states i.e. Karnataka, Maharashtra, Tamil Nadu and Nagaland have seen their market borrowings so far in the current financial year increase by over 100% from year ago period, stated the CARE Ratings report.
As per the report, Nagaland has raised Rs 700 crore market borrowings so far during the Fiscal Year 2020-21 (April7- October 6), denoting a 200% increase from the same period last year.
Government raises fund from the market either by auction of state government securities or via state development loans (SDLs).
On October 6, 17 states raised a total of Rs.22, 350 crore at the auction of state government securities or SDLs. The share of Nagaland in the auction of SDLS was Rs 250 crore, it added.
Overall, Maharashtra, Tamil Nadu, Andhra Pradesh, Karnataka and Rajasthan have been top 5 borrowing states, accounting for 52% of the total borrowings by state governments so far in 2020-21, the report said.
8 states (Madhya Pradesh, Meghalaya, Haryana, Assam, Uttrakhand, Andhra Pradesh, Odisha and Chhattisgarh) have seen an increase of 50-100% while Sikkim, Telangana, Jammu & Kashmir, Kerala, Rajasthan, Haryana, Gujarat, West Bengal and Mizoram have seen an increase of 23-36%, it added.
The report, however, noted that due to the sharp decline in the revenues of the state governments due to COVID-19 and subsequent lockdown, coupled with higher expenditure requirements to mitigate the impact of the pandemic, their finances have been “severely pressured.”
To meet their funding requirements, states have been increasingly resorting to market borrowings, it said.
There has been a significant increase in the market borrowings for the majority of the states so far in the current financial year when compared with the comparable period of year ago, it added.
According to the report, barring 8 states – Arunachal Pradesh, Bihar, Jharkhand, Himachal Pradesh, Punjab, Manipur, Uttar Pradesh and Tripura, the borrowing of all the other states has seen a notable increase – ranging between 21% to 343% - from year ago.
