Tamil Nadu’s market borrowings have touched ₹82,000 crore in FY2020-21 (from April 7-March 21), up 37% from ₹59,990 crore in the comparable period last year.
The State has been the biggest borrower among other States so far. On Tuesday, it raised ₹2,500 crore through re-issue of a 10-year bond, also called State Development Loans. The bond had a yield of 7.16%.
The States and Union Territories have been resorting to higher market borrowings this year, amid a shortfall in finances due to the pandemic on the one hand and increase in expenditure on the other.
Tamil Nadu, Maharashtra, Uttar Pradesh, Karnataka, Rajasthan and Andhra Pradesh have been the top six borrowing States, accounting for 53% of the total borrowings so far in 2020-21. There has been a notable year-on-year increase in the market borrowings of large States such as Madhya Pradesh (112%), Rajasthan (57%), Maharashtra (54%), Karnataka (43%), Tamil Nadu (37%), Telangana (36%) and Andhra Pradesh (28%), according to Care Ratings. Replying to the general discussion on the interim budget for 2021-22 in the Assembly, Deputy Chief Minister O. Panneerselvam had pointed out that the State was facing a shortfall to the tune of ₹38,674.52 crore in its revenue receipts for 2020-21 due to COVID-19 pandemic impact.
“Even though some measures were taken to control expenditure, it cannot be done beyond a limit, which would have affected the public. While the revenue receipts have fallen, the expenditure has increased, resulting in a deficit situation, which led to the borrowings,” he had pointed out.
As a result, the revised estimate for the borrowings was at ₹92,497.95 crore in 2020-21, when compared to ₹57,802.94 crore that was estimated when the budget was presented, Mr. Panneerselvam had said, adding that it was well within limits prescribed by the 15th Finance Commission
