The Tamil Nadu government’s market borrowings are set to hit ₹60,000 crore so far this fiscal, with the State planning to raise ₹1,000 crore more this week.
The State has so far borrowed ₹59,000 crore through the issue of bonds, known as State Development Loans (SDLs), up 43% from ₹41,390 crore in the comparable period last year. On December 8, it raised ₹2,000 crore.
Tamil Nadu plans to reissue a bond with a tenure of 10 years and raise ₹1,000 crore on December 15 through an e-auction to be conducted by the Reserve Bank of India.
Tamil Nadu has been resorting to higher market borrowings to meet the revenue shortfall due to the economic disruption caused by the lockdown imposed to curb COVID-19 and the increased expenditure on controlling the spread of the pandemic.
Tamil Nadu has the second highest borrowings among the States so far this year, after Maharashtra, which has borrowed ₹65,000 crore.
According to the provisional figures from the Comptroller and Auditor-General (CAG), the State’s fiscal deficit (the difference between the total revenue and the expenditure, excluding borrowings) stood at ₹34,635.78 crore as of October.
The revenue deficit (the difference between the revenue receipts and the revenue expenditure) stood at ₹23,812.45 crore till October. A revenue deficit shows the government’s earnings are not adequate to meet its day-to-day operational expenses. With more relaxations in the lockdown, the situation may ease a little.
The State’s revenue receipts stood at ₹83,795.57 crore as of October, while the total expenditure stood at ₹11,8431.35 crore, according to CAG. The CAG said some of the components like the expenditure on subsidies, salaries and wages for October were still being compiled.
The weighted average cost of borrowings for Tamil Nadu increased to 6.69% in December from 5.89% in November, according to CARE Ratings. However, the borrowing cost has come down from 7% in April.
