Archive · 5 Oct 2026
State Borrowing Set to Rise 26% to ₹3.6 Trillion
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.
ICRA projects gross state government securities issuance of ₹3.6 trillion in Q3 FY27, up 25.9% from a year earlier.
After estimated redemptions of ₹1.3 trillion, net state borrowing is expected to reach ₹2.3 trillion, a 26.8% increase.
Twenty-six states and Union territories have adopted the RBI’s Benchmark Issuance Strategy and account for 77% of planned Q3 borrowing.
Maharashtra, West Bengal and Haryana account for nearly 70% of the ₹742 billion increase in planned gross borrowing.
States plan to raise ₹1.06 trillion in October, ₹1.14 trillion in November and ₹1.4 trillion in December.
- Who
- State governments; ICRA made the borrowing estimate, and the Reserve Bank of India introduced the Benchmark Issuance Strategy.
- What
- Gross state bond issuance is projected to rise 25.9% year on year to ₹3.6 trillion in Q3 FY27.
- When
- October–December 2026, the third quarter of FY27; the report was released on Monday.
- Where
- India.
- Why
- States are borrowing to refinance maturing debt and meet welfare and revenue expenditure.
- 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.