Will total market borrowings by states and UTs surpass Rs 2.81 lakh crore in Oct-Dec?
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Synopsis
In a significant financial forecast, the RBI reveals that Indian states and Union Territories are set to borrow over Rs 2.81 lakh crore this quarter. Key states like Tamil Nadu and Uttar Pradesh are leading in borrowing plans, highlighting the ongoing fiscal strategies amid market conditions. Discover the implications of these borrowings and the upcoming auction schedules.
Key Takeaways
- States and UTs to borrow Rs 2.81 lakh crore.
- Tamil Nadu leads with Rs 39,000 crore.
- Uttar Pradesh follows with Rs 33,000 crore.
- Auctions begin on October 7.
- RBI aims for non-disruptive borrowing process.
Mumbai, Oct 3 (NationPress) The Reserve Bank of India (RBI) revealed on Friday that state governments and Union Territories are projected to secure Rs 2,81,865 crore through market borrowings in the upcoming October-December quarter of the current financial year.
Tamil Nadu stands out as one of the largest borrowers, aiming to raise Rs 39,000 crore during this period.
Uttar Pradesh, being the most populous state in India, has announced plans to borrow a total of Rs 33,000 crore across 11 auction rounds of Rs 3,000 crore each, while West Bengal intends to borrow Rs 29,000 crore.
Gujarat has stated its intention to raise Rs 20,000 crore through market borrowings in this quarter, while nearby Rajasthan aims for Rs 14,455 crore.
West Bengal, under Trinamool Congress governance, has informed the RBI of its plan to secure Rs 28,000 crore, distributed over 10 tranches, predominantly of Rs 3,000 each.
Election-bound Bihar has indicated a borrowing plan of Rs 9,800 crore, while Odisha aims to borrow Rs 9,000 crore in equal tranches of Rs 1,000 crore each. The mountainous state of Himachal Pradesh plans to mobilize Rs 1,500 crore, and neighboring Uttarakhand intends to raise Rs 4,000 crore. Madhya Pradesh is looking to gather around Rs 15,600 crore through debt.
Collectively, Indian states borrowed Rs 5 lakh crore via debt sales in the initial six months of the financial year concluding in March 2026. The new auctions are set to commence on October 7, with a total of 13 rounds planned until December 30. The RBI has released a comprehensive list of market borrowings by states. The borrowing calendar for states and Union Territories kicks off on October 7, a Tuesday, and will continue each subsequent Tuesday for 13 weeks until December 30.
The actual borrowing amounts and the specifics of the participating states/UTs will be communicated two or three days before the auction day, as stated by the Reserve Bank. The process will depend on the needs of the state governments and UTs, the approval from the Government of India under Article 293(3) of the Constitution, and prevailing market conditions.
The RBI affirmed that it would conduct the auctions in a non-disruptive manner, considering market conditions and other pertinent factors, ensuring an even distribution of borrowings throughout the quarter. The central bank also retains the authority to adjust auction dates and amounts in consultation with state governments and UT administrations.
Point of View
It's vital to recognize the importance of these borrowings by states and UTs. The Reserve Bank of India plays a crucial role in facilitating these transactions, ensuring that states can meet their financial needs while considering market stability. This approach fosters economic growth and development across the nation.
NationPress
03/10/2025
Frequently Asked Questions
What is the total borrowing expected by states and UTs in the October-December quarter?
States and Union Territories are expected to raise a total of Rs 2,81,865 crore through market borrowings.
Which state plans to borrow the most?
Tamil Nadu plans to borrow Rs 39,000 crore, making it one of the highest borrowers this quarter.
When will the borrowing auctions begin?
The borrowing auctions are set to commence on October 7 and will continue through December 30.
How does the RBI ensure a non-disruptive auction process?
The RBI conducts auctions in a non-disruptive manner, taking into account market conditions and distributing borrowings evenly throughout the quarter.
What factors influence the borrowing amounts and dates?
Borrowing amounts and dates depend on the needs of the state governments, approval from the Government of India, and prevailing market conditions.
