BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
SBI Research Report
The Government has given option to state governments to borrow as much as Rs 2.35 lakh crore in the form of borrowings, over and above Rs 4.28 lakh crore allowed to states under Atmanirbhar package. However, Article 293 (3) of the Indian Constitution imposes certain restrictions on the borrowings by the state governments.
The Article stipulates that a state may not, without the consent of the Government of India, raise any borrowings if it has any loan outstanding, which is repayable to the Government of India.
Furthermore, under the Constitution, State Governments, unlike the centre, cannot borrow externally.
The centre plays the role of an intermediary in the transfer of external borrowings to States.
We propose three options of how states meet the shortfall-
1.The first option is the Reserve Bank of India monetizes state debt,
2. The next option in borrowing could be a review and enlargement of ways and means advances (WMA)
3. The third option is recourse to National Small Savings Fund (NSSF).
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
As a Subscriber you get
Stories
RECOMMENDED FOR YOU
POPULAR