Big Borrowing for Bengal: State Gears Up for Rs 59,955 Crore Fiscal Push

The government of West Bengal has announced plans to borrow a substantial amount of Rs 59,955 crore in the fourth quarter of the fiscal year, as per the indicative calendar on market borrowings released by the Reserve Bank of India (RBI). This decision forms part of a broader trend where various states and Union Territories across India are set to raise a total of Rs 4.13 lakh crore in the same period. Notably, other states such as Madhya Pradesh, Maharashtra, Gujarat, Bihar, Andhra Pradesh, Karnataka, Punjab, and Assam are also involved in similar borrowing initiatives.

In addition to this state-level borrowing, the RBI disclosed that the Central Government intends to raise Rs 3.93 lakh crore through the issue of Treasury Bills in the quarter. Treasury Bills, commonly known as T-bills, are short-term government securities issued for up to 364 days. The RBI also facilitates the issue of dated securities on behalf of the Central Government, which forms a part of the government’s strategy to meet its fiscal borrowing targets. For this fiscal year, the gross borrowing target is set at Rs 15.43 lakh crore, with Rs 6.55 lakh crore to be raised in the second half of the year, as announced in late September.

Furthermore, the RBI has given banks and other regulated entities, including non-banking financial companies (NBFCs), additional time until April 1 to implement its modified norms for levying penalty charges on loan accounts. This extension is provided to allow these entities sufficient time to reconfigure their internal systems and operationalize the circular issued in August, which focuses on ‘Fair Lending Practice — Penal Charges in Loan Accounts’.

On a related note, the Leader of Opposition in West Bengal, Suvendu Adhikari, has claimed that the state has breached its borrowing limit under the Fiscal Responsibility & Budget Management (FRBM) Act by requesting a loan of Rs 10,000 crore from the RBI. Adhikari has urged the Union Finance Ministry to advise the state to generate internal revenues and create a conducive environment for industry and investment, which would help alleviate the debt burden. In response, State Minister Chandrima Bhattacharya countered that West Bengal is entitled to open market borrowing under the FRBM Act and ranks among the leading states in GDP growth due to prudent fiscal management.

This borrowing plan and the ensuing debate highlight the complex fiscal dynamics at play between the state and central governments in India, particularly in the context of managing public debt and fostering economic growth​​​​.



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