State to raise Rs1,000 cr on Aug 23 through issue of 16-yr SDLs
By Amit C
THIRUVANANTHAPURAM/August 20-2022: Kerala is set for its third market borrowing in the current financial year with Rs1000 crore slated for August 23 by selling 16-year state development loans (SDLs) or bonds to the investors.
This will take the aggregate [market] borrowing of the state so far in the current year to just Rs4500 crore – including Rs1500 crore borrowed in the first quarter and Rs2000 crore on August 2.
The state had borrowed Rs11,500 crore during the said period in the earlier year (until Aug 24) thus rendering a 61 per cent decline in the current year borrowing compared with last year’s.
Far behind borrowing calendar
Kerala has far been lagging behind the borrowing calendar prepared and published by the Reserve Bank of India (RBI) for the second quarter (Q2) too.
As per the RBI calendar, the state was supposed to have borrowed Rs1,000 crore each on July 26 and August 8, which never materialised, obviously for want of green signal from the Centre.
As per the RBI borrowing calenda, the state could have borrowed Rs9,000 crore each in both quarters – Q1 and Q2.
Some relief to states
ICRA Ratings in its note said that Centre had released two instalments of tax devolutions to the states aggregating Rs1,20,000 crore in August 2022 against Rs58,300 crore in July.
Kerala’s share in this works out to Rs2,310 crore. Moreover, in May, the Centre had released the entire amount of GST compensation payable to States up to May 31, 2022 by releasing an amount of Rs 86,912 crore, where Kerala’s share was to the tune of Rs5693 crore.
Kerala is the second largest recipient of Post Devolution Revenue Deficit Grant (PDRDG) from the Centre at Rs13,174 crore for the current year, and the state has already received Rs4391 crore towards this so far this year.
