The State government is likely to get a breather on Monday when the auction of its securities worth ₹2,000 crore will be taken up by the Reserve Bank of India.
Auction of government securities worth ₹2,000 crore — ₹1,000 crore with a tenure of eight years and another ₹1,000 crore with 10-year tenure — on Monday form part of the first of the six tranches in which the government had proposed to raise resources. The result of the auction, to be conducted on the RBI Core Banking Solution (e-Kuber), would be announced on Monday itself while payment by successful bidders would be made during the banking hours on Wednesday at Mumbai and at respective regional office of the RBI.
Following the financial crisis faced due to the lockdown imposed across the State to contain the spread of the coronavirus (COVID-19), the government had decided to opt for open market borrowings through the RBI. The financial condition was said to be so acute that in Chief Minister K. Chandrasekhar Rao’s own words the tax and non-tax revenue of the State was just ₹100 crore since April 1 this year as against ₹4,000 crore average monthly collection.
To tide over the crisis, the government has decided to mobilise resources through open market borrowings and according to RBI’s indicative calendar of market borrowings, the State had decided to raise ₹9,000 crore in six tranches till the end of the first quarter, June 30. According to RBI website, the State was eligible for open market borrowings of ₹15,051 crore for the first nine months of the current financial year. Of this, the government has decided to raise ₹9,000 crore over a period of three months.
The next tranche of ₹1,000 crore would be through auction of securities worth ₹1,000 crore to be conducted by the RBI on April 28.
