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State Borrowing Set to Rise 26% to ₹3.6 Trillion

State borrowing to rise 26% to ₹3.6 tn in Q3 under new issuance strategy: ICRA · livemint.com

States in India plan to borrow more money in October, November and December than they did in the same period last year.

ICRA expects them to issue ₹3.6 trillion in bonds.

Some of the money will help repay older debts, and some will pay for welfare and other expenses.

After subtracting debts that are due for repayment, net borrowing is expected to be ₹2.3 trillion.

Twenty-six states and Union territories are using a new RBI strategy that sets standard time periods for their bonds.

ICRA says this may make borrowing plans a better guide to how much they actually raise.

Maharashtra, West Bengal and Haryana account for most of the planned increase.

December is expected to be the busiest month for borrowing.

Meanwhile, the Centre has reduced its planned borrowing for the second half of the fiscal year.

Key facts

Projected gross issuance: ₹3.6 trillion in Q3 FY27, compared with ₹2.9 trillion raised in Q3 FY26.
Projected net borrowing: ₹2.3 trillion after estimated redemptions of ₹1.3 trillion, up from ₹1.8 trillion in Q3 FY26.
Benchmark strategy participants: 26 states and Union territories, representing about 77% of planned Q3 borrowing.
Largest contributors to increase: Maharashtra: ₹198 billion; West Bengal: ₹183 billion; Haryana: ₹135 billion.
Monthly planned issuance: October: ₹1.06 trillion; November: ₹1.14 trillion; December: ₹1.4 trillion.
Centre's H2 borrowing plan: ₹7.86 trillion through dated government securities; FY27 total borrowing is estimated at ₹15.995 trillion, versus ₹17.2 trillion in the Union budget.

livemint.com · 3 hrs ago