Politics · India · 9 hrs ago
RBI urges Indian states to improve spending and borrowing practices
At a conference in Mumbai, RBI Governor Sanjay Malhotra urged Indian states to strengthen their financial management.
He called for better-quality public spending, careful cash management and prudent borrowing to protect states’ long-term finances.
The meeting brought together finance officials from 27 states and three Union Territories, along with senior central government officials.
States borrow in markets and can receive short-term liquidity support from the RBI when payments and receipts do not match.
The conference reviewed state borrowing and the RBI’s short-term financial support, amid concerns that some states rely heavily on that support while others hold large cash balances.
Malhotra also urged states to use the Unified Lending Interface and programmable central bank digital currency for direct benefit transfers.
The RBI released a guide to state cash and debt management, and the conference discussed ways to improve how states handle borrowing and short-term cash needs.
RBI Governor Sanjay Malhotra urged Indian state governments to improve spending quality and use prudent borrowing and cash management practices.
He said these steps would support states’ long-term fiscal health.
Malhotra made the recommendations at the 36th Conference of State Finance Secretaries on Tuesday.
He also urged states to use the Unified Lending Interface and programmable central bank digital currency for direct benefit transfers.
The conference reviewed state market borrowings and short-term financial support from the RBI.
- Who
- RBI Governor Sanjay Malhotra and state governments.
- What
- Malhotra urged states to improve expenditure quality, cash management and borrowing practices.
- When
- Tuesday, October 27, 2026.
- Where
- The conference was at the Mint Road, according to the Economic Times; Mint reports it was in Mumbai.
- Why
- To support states’ long-term fiscal sustainability.
This story does not have two clearly opposing sides.
A high-level panel reviewing RBI liquidity highlighted that some states remained over-dependent on RBI support while a few held much higher cash balances to avoid emergency borrowing.
Malhotra addressed the 36th Conference of State Finance Secretaries and urged states to improve spending, borrowing and cash management.
Malhotra released the Compendium on Cash and Debt Management for State Governments.
- Conference
- 36th Conference of State Finance Secretaries
- Participants
- Finance secretaries from 27 states and three Union Territories
- Governor
- Sanjay Malhotra
- Digital platforms
- Unified Lending Interface and programmable central bank digital currency for direct benefit transfers
- Publication
- Compendium on Cash and Debt Management for State Governments