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To tide over the situation arising from the outbreak of Covid-19 pandemic, the Reserve Bank of India (RBI), in consultation with the Government of India, has revised the limit for Ways and Means Advances (WMA) for the remaining part of the first half of FY21 (April 2020 to September 2020) to ₹2-lakh crore.
On March 31, the WMA limit for the first half of FY21(April 2020 to September 2020) was upped to ₹1.20-lakh crore against ₹75,000 crore in the year-ago period. The hike in the limit comes in the wake of expectation that the Central government will step up expenditure on the social sector, including health and sanitation, following outbreak of the pandemic.
The central bank provides financial accommodation to the government to tide over temporary mismatches in the cash flow of its receipts and payments as WMA. This is intended to provide a cushion to the government to carry on its essential activities and normal financial operations.
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