State Government Borrowings – Clarification

Reserve Bank of India

There are certain media reports that the Government of India has allowed States to avail up to 50% of their borrowing requirement for the Financial Year 2020-21, in April 2020 itself.

In this connection, the communication issued by Government of India on the subject is available at the following link:

https://doe.gov.in/whatsnew/goi-consent-under-art-293-3-raising-omb-states-during-2020-21

(Yogesh Dayal)     
Chief General Manager

Press Release : 2019-2020/2201

No. 40(6) PF-S/2017-18/Vol.V
Government of India
Ministry of Finance
Department of Expenditure

(Public Finance-States Division)
****

North Block, New Delhi
Dated: the 23rd March. 2020

To

General Manager, RBI,
Internal Debt Management Department, Central Office,
Shahid Bhagat Singh Road,
Mumbai – 400001(Fax.No.022-22705125)

Subject: Gol consent under Article 293(3) of the Constitution of India for raising Open Market Borrowing (OMB) by States during the FY 2020-21.

Reference: Government of India letter of even no. dated 19.03.2020 regarding fixation of net borrowing ceiling of States for 2020-21.

Sir,

I am directed to refer the reference cited as above and to inform that it has been decided by the competent authority in Gol to accord consent to the State Governments under Article 293(3) of the Constitution of India to raise open market borrowing (OMB) on the basis of 50% of Net Borrowing Ceiling fixed for the year 2020-21 as per Annexure under proposed Borrowing Programme of the State for financing the State’s Annual Plan 2020-21.

2. GoI Consent under Article 293(3) of the Constitution of India for the aforesaid borrowing by State Governments is applicable for first nine months of the current financial year 2020-21, and as per the State Government advance indicative calendar submitted to RBI. It is noted that further consent for raising OMB for first nine months of 2020-21 shall be processed on receipt of complete information from the State.

3. RBI is requested to make necessary arrangement in consultation with State Government to raise the above OMB.

4. Total OMB allowed to the State Government so far during the current year including the above amount would be the amount as mentioned in Annexure. State Govt. is requested to furnish a copy of the specific notification issued for this market borrowing.

Yours faithfully,

(Amit Kumar)
Deputy Director (PF-S)
Tele: 23095697
Email: pfstates.doe@gov.in

Copy forwarded to:-

1. The Principal Secretary (Finance), concerned State Government, Finance Department.

2. Accountant General (A&E), concerned State Government.

3. Principal Adviser (FR), NITI Aayog, Yojana Bhavan, Sansad Marg, New Delhi.

(Amit Kumar)
Deputy Director (PF-S)

Annexure

Open Market Borrowing (OMB) to 28 States on ad hoc
basis for the first nine months of the year 2020-21

(Rs. in crore)