Maharashtra, Bengal, Tamil Nadu set to account for a 3rd of borrowings in Q2

The mixed borrowing indicated by three states — Maharashtra, Tamil Nadu (TN) and West Bengal (WB) — accounts for a 3rd of the entire issuance of Rs 1,69,600 crore anticipated within the second quarter of fiscal 2022.
According to the Reserve Bank of India, Maharashtra has indicated that it’ll borrow Rs 25,000 crore on this quarter, the very best among the many 26 states and Union Territory, adopted by West Bengal (Rs 18,000 crore) and TN (Rs 15,500 crore).
Given UP’s modest issuance of Rs 5,000 crore in Q1 of FY2022 and nil indicated issuance in Q2 of FY2022, the state may very well be repeating the technique of a extremely back-ended borrowing in FY2021 (82 per cent of the entire issuance in H2 FY2021) within the ongoing fiscal, in response to Icra.
The indicative calendar of market borrowings for Q2 FY2022 launched by the RBI on July 1, 2021, has pegged the market borrowing of 26 state governments and one Union Territory at Rs 1,69,600 crore, 9 per cent decrease than complete State Development Loan (SDL) issuance of Rs 1,86,300 crore in Q2 of final 12 months.
The weighted common cut-off of the gross SDLs issued within the first quarter of FY2022 stood at 6.88 per cent, a considerable 30 bps greater than Q1 FY21 stage.
In the primary quarter, the gross SDL issuance stood at Rs 1,44,600 crore, 19 per cent decrease than the initially indicated Rs 1,78,300crore, regardless of the widening state-level restrictions amidst the second wave.
The state governments’ money circulation scenario in Q1 FY2022 was bolstered by three main components, particularly the receipt of further tax devolution of Rs 45,000 crore from the federal government (GoI) in late-March 2021 (in extra of the Rs 5,50,000 crore tax devolution that has been included within the revised estimates (RE) for FY2021), record-high GST inflows of Rs 140,000 crore in April 2021 that pertained to exercise within the earlier month — earlier than the second wave ratcheted up — and receipt of considerable transfers associated to fifteenth Finance Commission’s suggestions by some states (Rs 43,600 crore in April-May 2021).

The gross SDL raised in April was decrease than indicated (Rs 9,200 crore in opposition to Rs 48,700 crore), following which the hole narrowed in May (Rs 50,600 crore in opposition to Rs 58,700 crore). The scenario reversed in June, with the issuance being 19.6 per cent greater than the indicated quantity (Rs 84,900 crore in opposition to Rs 71,000 crore).