TN leads in borrowings, exceeds target, says BoB
State governments recently concluded their borrowing program for Q2FY24 and announced planned borrowing for Q3FY24.
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CHENNAI: At Rs 54,000 crore, Tamil Nadu leads the country in its borrowing with Rs 5,000 crore being taken in excess till October 3 this fiscal, said Bank of Baroda in a report.
According to the report, the most significant increase in actual borrowing compared to planned borrowing was by Andhra Pradesh (+Rs 8,500 crore), Telangana (+Rs 6,300 crore) and Tamil Nadu (+Rs 5,000 crore). “In FYTD24 state governments have together raised Rs 3.8 lakh crore from the markets so far (till October 3).
Of this amount, Rs 2.1 lakh crore (about 56 per cent) was raised in Q2FY24 (July-September 2023) by 23 states. Notably, this is slightly lower than Rs 2.4 lakh crore planned in the indicative calendar,” Sonal Badhan, Economist, Bank of Baroda said in the report.
State governments recently concluded their borrowing program for Q2FY24 and announced planned borrowing for Q3FY24.
According to Badhan, in Q3, states have projected to raise another Rs 2.4 lakh crore from the markets. “With this, total planned borrowing for states in FYTD24 (April-December) stands at Rs 6.7 lakh crore, of which Rs 3.8 lakh crore has been raised till 3 October 2023.
“The cost of borrowing for states in FYTD24 remained 17-35bps higher than G-Sec rates, and ranged from 7.31 per cent (Gujarat) to 7.48 per cent (Uttarakhand),” the report notes.
Gujarat being one of the better fiscally-managed states was able to raise money through short-term papers also at a lower rate. On the other hand, states with higher fiscal imbalances, like Punjab, Rajasthan, West Bengal, Andhra Pradesh, borrowed through longer-tenured papers to manage cost, the report said.
While Tamil Nadu, Telangana, and Andhra Pradesh also exceeded their targeted level of borrowing in FYTD24, states like Gujarat and Maharashtra borrowed much less than planned.
