States manage to raise more than Rs 15,000 crore at auction of SDLs

MUMBAI: Fourteen states including Tamil Nadu, Gujarat, Haryana, Uttar Pradesh, Telengana and Bihar raised Rs 15,475 crore at the auction of state government securities or state development loans (SDLs), Care Ratings said in a note today.

Most state governments have seen their revenues being hit but costs going up due to Covid pandemic.

The amount was Rs.321 crores more than the total notified amount of the auction. While three states viz. Gujarat, Telangana and Haryana accepted additional amounts at the auction, Assam did not accept any amount in the 10 year security and Punjab accepted 57 per cent (of Rs. 570.53 crores) of the notified amount. Gujarat and Telangana accepted an additional amount of Rs. 500 crores each and Telangana accepted an additional amount of Rs.250 crores, Care Ratings said.

So far 28 states and 2 union territories have raised Rs. 4.64 lakhs crores through market borrowings, 51 per cent more than the same period a year before. As per the borrowing calendar for the first three quarters of 2020-21 (Apr-Dec), the states are to borrow a total of Rs. 5.07 lakhs crores, the report said.

“The sharp fall in the revenues on account of the lockdown coupled with an increase in expenditure for controlling and mitigating the impact of the pandemic has severely strained state finances,” the report added.

The report said that only seven states including Arunachal Pradesh, Himachal Pradesh, Manipur, Uttar Pradesh, Odisha, Punjab and Tripura have not increased their borrowing compared to last year’s.