Six states raise Rs. 11,500 crore in state development loan(SDL) sales
Assam, Chhattisgarh, Himachal Pradesh, Jharkhand, Madhya Pradesh, Odisha, and Tripura were supposed to generate a total of Rs10,800 crore but have yet to touch the market.
According to RBI data gathered by Care Ratings, six states raised Rs11,500 crore in the auction of state government securities or state development loans (SDLs) held on Tuesday.
“Fewer states are accessing the economic markets for money now in the current financial year as compared to an equivalent amount in FY21,” in fact with the research. According to Care Ratings, 17 states and one union territory (UT) have raised Rs90,750 crore in FY22, compared to 22 states and one UT that raised Rs1.42 trillion in the previous fiscal year. The provisional borrowing schedule called for twenty-six states and one UT to fund Rs1.39 trillion from April 8 to June 8, 2021. However, just 65% of this total has been raised thus far.
Assam, Chhattisgarh, Himachal Pradesh, Jharkhand, Madhya Pradesh, Odisha, and Tripura raised a total of Rs10,800 crore but had yet to approach the market for financing, according to the report.
The report said: “There are fewer and fewer states issuing market-oriented loans this fiscal year, mainly because the states have lower revenue costs,” the statement said, adding that some states can also benefit from the special diversion mechanism of financing agreements.
“Loans through special borrowing mechanisms and advance payments and funds concerning the repo rate are cheaper than funds obtained through the issuing of SDL.