Coronavirus pandemic | States can avail up to 50% of their FY21 borrowing limit in April alone: Report

To help states during the COVID-19 pandemic, the Centre has permitted them to use up to 50 percent of their fiscal year's borrowing requirements in April alone, according to a Business Standard report.

"If they want to borrow 50 percent of their limits upfront, and completely front load their borrowing, they can do so,” a government official told the publication.

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The Centre might even consider easing the overall borrowing limit for state, if required, the report said.

Moneycontrol could not independently verify the story.

States were given the green signal for the increased borrowing in April before the Reserve Bank of India (RBI) had released an indicative calendar on March 31, the publication reported.

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"The quantum of total market borrowings by the State Governments for the quarter April - June 2020, is expected to be Rs 1,27,205 crore," the central bank said in its indicative calendar for state government borrowings.

Out of the total Rs 1.27 lakh crore anticipated borrowing by states in the first quarter of 2020-21, Rs 55,225 crore is expected to take place in April, the RBI added.

The amount of money borrowed will be decided by the states and the RBI, the report said.

“Each state will decide, after discussions with the RBI, how much it wants to borrow and the future liability it wants to take in interest payments, what is the appetite in the bond markets for their securities, when is the right time, and related issues,” the official cited earlier told the paper.