TN remains top borrower as all States pick up 51% more debt

Our Bureau Chennai | Updated on September 08, 2020

In the auctions of State government securities held today, 13 States raised a total of ₹15,675 crore

Tamil Nadu continues to be the heaviest borrower among all States, having scooped ₹46,000 crore under the ‘state development loan’ programme, between April 7 and September 8. In the auctions of State government securities that were held today, 13 States raised a total of ₹15,675 crore, which was ₹1,500 crore more than the notified amount of the auction as two States, Haryana and Maharashtra exercised their greenshoe option and took more, according to a report of the ratings agency, CARE.

So far in the current fiscal year (April 7–September 8), 26 States and 2 UTs have cumulatively raised ₹2.97-lakh-crore via market borrowings — 51 per cent increase from the borrowings in the corresponding period of 2019-20 (₹1.97-lakh-crore from April 9- September 9).




While Tamil Nadu did not participate in the auctions of today, it remains the top borrower, its take having more than doubled from ₹21,190 crore in the corresponding period of last year—when again, it was on the top of the list.

Maharashtra and Karnataka grew more in percentage terms — 475 per cent and 200 per cent, respectively— compared with last year.

CARE notes that the cost of borrowings for State government has risen to a 4-month high. The weighted average yield of State government dated securities (across States and tenures) auctioned today at 6.57 per cent was 8 bps higher than a week ago, it said.

Tamil Nadu began this year with a record fiscal deficit of ₹59,346 crore, even while managing to keep its nose above water by limiting its fiscal deficit to 2.84 per cent of the State GDP, against the mandatory ceiling of 3 per cent.

In his Budget speech in February, Tamil Nadu’s Finance Minister said the State would wind up the year with a net outstanding debt of ₹4.56-lakh-crore and a debt-to-GDP ratio of 21.83 per cent, well below the 25 per cent norm.

Published on September 08, 2020

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor

You May Also Like