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Rating agency ICRA in its latest report titled ‘State Government Finances- Weekly SDL’ has said that market borrowings by 18 state governments/Union Territory (UT) stood at Rs 1,102 billion in Q1 FY2023, nearly 42% lower than the indicated Rs 1,902 billion. On a Y-o-Y basis, the borrowings in Q1 FY2023 were 23.7% lower than Rs 1,446 billion in Q1FY2022.

ICRA said this reflected a comfortable cash flow position of the state governments led by a highly back-ended release of the tax devolution to the states in FY2022 as well as the changes in the borrowing permission for FY2023 granted by the Government of India (GoI) to the state governments.

In the last auction of Q1 FY2023, nine states raised Rs 195 billion through state development loans (SDLs) on June 28, 2022, nearly 4% higher than the indicated amount of Rs 188 billion for the week. Andhra Pradesh (AP) and Telangana together borrowed additional Rs 30 billion and Assam, Haryana and Madhya Pradesh (MP) raised Rs 70 billion SDLs even though they had not indicated to participate in weekly auction.