Annexes - ആർബിഐ - Reserve Bank of India
Annexes
Schedule of the Meetings of the Advisory Committee with Officials/Experts
Sr. No. |
Date |
Place |
Officials/Experts |
1 |
October 7, 2002 |
New Delhi |
Dr. Rakesh Mohan, Deputy Governor (DG), RBI |
2 |
October 8, 2002 |
New Delhi |
Officials of Government of India |
3 |
October 26, 2002 |
Hyderabad |
Shri B.P.R. Vithal, Chairman, Informal Advisory Committee on WMA to State Governments and Dr. Y.V. Reddy, former DG, RBI & ED, IMF |
4 |
October 30, 2002 |
Mumbai |
Shri S.S.Tarapore, former DG, RBI and officials of RBI. |
5 |
October 31, 2002 |
Mumbai |
Officials of Chhattisgarh, Gujarat, Madhya Pradesh, Maharashtra and West Bengal |
6 |
November 7, 2002 |
Bangalore |
Officials of Karnataka, Kerala and Tamil Nadu |
7 |
November 8, 2002 |
Bangalore |
Committee Meeting |
8 |
November 18, 2002 |
Chennai |
Officials of Tamil Nadu |
9 |
November 20, 2002 |
New Delhi |
Officials of Government of India and Planning Commission and officials of Assam, Mizoram, Himachal Pradesh and Uttaranchal. |
10 |
November 21, 2002 |
New Delhi |
Officials of 12th Finance Commission and officials of Haryana, Orissa, Punjab and Uttar Pradesh. |
11 |
December 1, 2002 |
Bangalore |
Officials of Andhra Pradesh |
12 |
December 2, 2002 |
Bangalore |
Committee Meeting |
13 |
December 4, 2002 |
New Delhi |
Officials of Arunachal Pradesh, Bihar, Goa, Manipur, Meghalaya, Nagaland, Rajasthan and Tripura |
14 |
December 11, 2002 |
New Delhi |
Committee Meeting |
15 |
December 14, 2002 |
Chennai |
Committee Meeting |
16 |
January 3-5, 2003 |
Chennai |
Committee Meeting |
17 |
January 22, 2003 |
Mumbai |
Submission of Report |
Summary of the views expressed by the State Finance Secretaries in various Meetings of the Committee
Structural Problem
1 Most of the States agreed that the liquidity mismatch was not a temporary problem but has arisen out of deep rooted problem of fiscal imbalance. Some of the Finance Secretaries mentioned that because of such structural problems almost all States, except those under the financial aid programme of the World Bank and the Asian Development Bank are forced to avail of WMA/OD facility as a regular source of funding.
Normal Ways and Means Advances
2 Most of the Secretaries were of the opinion that the WMA limits should be increased. While most of them advocated increase as an interim measure, pending structural adjustment and fiscal correction, a few saw the need for such increase to meet the temporary liquidity needs even within a balanced budget itself. However, some States expressed the view that there is no requirement of revision as such an enhancement would encourage more expenditure by the States. There was a near consensus on the issue that the base for fixing the WMA limits should be the single factor of revenue receipts for simplicity instead of the twin factors of revenue receipts and capital expenditure as capital expenditure is not defined uniformly and therefore there is a possibility of this indicator varying for different States.
3 There was a view that WMA limit should be like working capital and, therefore, it should increase with the size of the budget. On the other hand, some States observed that WMA is only for liquidity mismatch and cannot be compared with working capital or line of credit. A few were of the view that the limit should be based on future budget estimates instead of using past data figures for computing the WMA limits. Another view was that the existing formula of the WMA limit should have a built-in adjustment factor to take into account the actual shortfalls in the budgeted transfers from the Central Government.
Special Ways and Means Advances
4 Some of the States felt that since the collateral consists only the Government of India dated Securities/Treasury Bills, no margin should be applied on the Special WMA. They also expressed the view that since the borrowings under special WMA are backed by collaterals, there should be a concession in the interest rate, preferably less than the Bank Rate which is the rate for Normal WMA. There was also a view that the revisions, which are at present undertaken on a quarterly basis, should preferably be undertaken on a monthly basis.
Overdraft
5 Some States expressed the view that they are not comfortable with the five-day stipulation in the overdraft regulation scheme as it is not possible to arrange resources within this short period. Some of them suggested that it should be increased to seven days while some others felt that the stipulation should be removed altogether.
6 The Finance Secretaries generally expressed satisfaction on the 12 days' stipulation. Some States however, suggested that as the liquidity mismatch mostly arises between 7th and 25th of a month, the OD period should be increased. The period of extension sought by the Finance Secretaries varied from 14 to 20 days.
7 Some of the States felt that there should be no ceiling on the amount of OD. However, some States suggested that the ceiling should be 200 or 300 per cent of the Normal WMA limit. With regard to the interest rates, some Finance Secretaries were not comfortable with the rate charged on OD. They suggested that the rates should be equal to Bank Rate or only marginally above the Bank Rate.
Other issues
8 Some of the States suggested that capital expenditure being large, they would prefer to have a schedule of market borrowings during the year. They proposed that like the Central Government, a calendar for State Government borrowings could also be prepared. Some of the States observed that there should be no distinction between the special and non-special category States.
9 Many States observed that as the funds mobilized under small savings, though released on monthly basis, reach the States with a lag of four months, the flow is uneven. This is mainly because in some months amount mobilized is higher than that in other months. The uncertainty on this account disturbs financial planning.
10 Some Finance Secretaries mentioned that the Plan size of the State which is decided by the Planning Commission and the Government of India in consultation with the State Government has been increasing every year. This incremental Plan size has to be financed by the State and there is increasing resort to WMA by the States in the absence of any other elastic and concessional source of finance.
11 With regard to dissemination of information on availment of WMA by the States in line with the practice followed by the Central Government, some States observed that this will have negative impact on the borrowings of the States while some others had no objection. One of the States expressed that it would be publishing these figures on its website on a daily basis. Other States were in favour of such a move as it would add to the transparency in the States' financial operations.
12 On the scaled rate of interest for the availment of WMA/OD, some States felt that this will be an additional burden on the States' finances. Some States appreciated it as they felt that WMA being most convenient way of raising resources is being used in a very liberal manner but once the pricing is appropriate, its utilization will be restrictive. Some of them, however, suggested that this would not restrict the States from borrowing from RBI as they are less sensitive to the interest rate.
13 The State Finance Secretaries also mentioned that under centrally sponsored schemes, the Central Government directly transfers funds for the projects to the concerned agencies without routing them through the Consolidated Fund of the States. It has been observed that large amount of funds lie in the bank accounts of these agencies without being utilized and, even during the situation of cash crunch, the States are not able to use these idle resources. This restricts the maneuverability of the States.
14 Some Finance Secretaries referred to externally aided projects. The States are required to first undertake the expenditure and thereafter claim reimbursement thereafter from the Central Government. This also strains liquidity management of the States.
15 A few of them mentioned that States incur large amount of off-budget liabilities like guarantees, etc. and this puts additional burden on their financial health.
Summary of Responses to the Questionnaire* |
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Sr. |
Item |
Special category |
Non-special category |
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1 |
2 |
3 |
4 |
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A |
General |
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1 |
In your view how should temporary mismatches between receipts and payments be defined? |
Gap between receipts and expenditure |
Most of the States viewed them as gap between receipt and expenditure |
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2 |
Do you see any specific pattern of cash crunch during any particular period of the month considering the pattern of receipts and expenditure? |
Entire month - April to August, festive seasons |
Most of them mentioned the first week of the month and the festival seasons |
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3 |
In your view what are the factors contributing to mismatches in the State Government’s accounts? Can you indicate the approximate weight-age to each of the following factors (in percentage terms): |
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a) |
Seasonal factors (receipts being fairly regular whereas payments were bunched at specific times) |
7% - 60% |
15%-40% |
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b) |
Capital transactions like large and lumpy repayments with limited control over the timing of capital receipts, such as, borrowings |
10%-40% |
10%-40% |
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c) |
Timing of transfers from Government of India. |
10%-20% |
10%-50% |
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d) |
Leads and lags in realization of revenue receipts, particularly, tax receipts |
5%-30% |
5%-50% |
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e) |
Any other factors (e.g., state specific reasons like major festivals) (please specify) |
5%-15% |
5%-35% |
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4 |
Do you think that the system of WMA and OD is currently serving other purposes rather than merely meeting the temporary mismatches? |
No- 4; |
Yes 3; |
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5 |
Do you think over the year WMA/OD has started to finance the budget deficit? If so, what other mechanism/instrument can be considered to address the issue of temporary mismatches exclusively? |
No- 4; |
No- 7; |
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6 |
How frequently should WMA/OD limits be revised? Should it be based on a formula? |
Every year |
Every year -12; |
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7 |
Do you think issuance of short-term Treasury Bills could be one such instrument to finance temporary cash requirements? |
No- 3; |
No- 10; |
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8 |
Do you think that the minimum balances required to be maintained by the State Governments at CAS, Nagpur should be increased. If so, why? |
No-All |
No- 11; Yes-4; |
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9 |
What is the manner of holding Public Accounts in your State? Are these invested in identifiable assets or are they merged in the accounts? |
Merged with accounts |
Most of them mentioned that they are merged with the accounts |
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10 |
Does you State periodically resort to seeking of temporary accommodation directly or indirectly through State level PSUs/co-operative bodies? |
No- All |
No- 9; |
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11 |
How do you view the proposal to liquidate your State’s investment in Government of India dated securities kept for the purpose of Special WMA, if any, before the State is allowed to avail of OD from RBI? |
No- 3; |
No- 11; |
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B |
Normal WMA |
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12 |
Do you think there is a need for revision in the present scheme for grant of WMA by RBI to State Governments? If yes, why? |
Yes-4; |
No- 5; |
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13 |
Do you think that the current methodology of arriving at WMA limits, i.e., certain percentage (i.e., 2.4% for non-special category States and 2.9% for special category States) of the average of the last three years’ revenue receipts and capital expenditure needs to be changed? If yes, what alternate methodology would you suggest? |
Should be raised up to 5% |
Should be raised to 3% - 5% |
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14 |
If you think there should be a revision, should it be by way of increase in the limit on advances? If so, by how much and what is the basis for suggesting the order of an increase? |
Yes- All |
Minimum 3 % and Maximum 5% |
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15 |
How do you monitor the availments under the WMA? What steps do you take when it exceeds the limits? Is your State in a position to clear WMA within a period of three months as stipulated? |
By curtailing expenses |
By monitoring daily positions from CAS Nagpur; most of the States did not offer comments on clearing OD within three months |
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16 |
Do you have any views on the interest charged on WMA in relation to its rate, impact on your budget, etc.? Do you think higher interest rate should be charged in case WMA is not cleared within the specified three months? |
Rate should be reduced |
Most of the States did not prefer any change in the interest rate.3 States wanted interest rate be less than or equal to Bank Rate |
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C |
Overdraft Scheme |
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17 |
How frequently your State gets into overdrafts and the reasons therefor? |
Frequently-3; Occasionally-2 |
Frequently-13; |
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18 |
Is the present overdraft (OD) scheme working satisfactorily? Do you have any suggestion to improve the scheme? Please also give your specific view/suggestions on:- |
Satisfied with the present scheme |
Satisfied with the present scheme |
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(a) i |
Whether you consider the five day limit is having a salutary effect |
Yes-2; |
Yes-8; |
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(a)ii |
with the improvement in payment system, do you think there can be reduction in number of days from the limit of five days. |
No-3; |
None were in favor of reduction |
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(b) i |
whether the 12 day limit on OD is appropriate |
Yes-2; |
Yes-5; |
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(b)ii |
If you feel there should be increase, please state the number of days by which it should be increased (and why this is required). |
Raise to maximum of 30 days |
Raise to maximum of 20 days |
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c) |
The Vithal Committee had suggested that no State Government should be allowed to avail OD for more than 20 working days in a Quarter. This suggestion has continued to be deferred till end March, 2003. The present Committee intends to examine this recommendation favourably. Kindly give your views on the implementation of this recommendation. |
Do not implement - All |
Do not implement-3 |
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19 |
Do you think there should be a ceiling on the amount of OD? |
No-5; |
No-9; |
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20 |
What are your views on interest being charged on OD? Should the interest rate of OD be related to the level of drawings and/or the period of OD? |
Rates to be equal or lower than Bank Rate |
Varied views |
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21 |
How does your State monitor the OD position? How do you normally clear the OD? |
Regulating expenditure |
Varied views |
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22 |
Should there be a regular mechanism of invoking the State’s market borrowing programme, when the overdraft is nearing its limit in terms of number of days? If so, how can this be done (e.g., by earmarking a portion of market borrowing for this purpose)? |
No-4; |
No-9; |
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D |
Special WMA |
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23 |
Are you satisfied with the existing system of investment of your governments surpluses both temporary (i.e., in Intermediate Treasury Bills) and durable (i.e., in auction Treasury Bills and Government of India dated securities)? |
Yes-4; |
All except one are satisfied with the present system. |
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24 |
Do you think that the scheme of Special WMA granted against the holdings in auction Treasury Bills and Government of India dated securities is working satisfactorily? |
Yes-4; |
All except one are satisfied with the present system. |
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25 |
Do you have any suggestions to improve the existing Special WMA scheme in terms of:- |
No comments |
No comments |
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a |
Margin |
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b |
Pricing |
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c |
Instruments |
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d |
Coverage |
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e |
Place of holding of securities |
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f |
Any other relevant aspect |
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26 |
Do you have any other suggestions/comments on the existing systems and procedures relating to WMA/OD scheme and investment of your surpluses? |
No comments - All |
Investment in short-term GOI securities should be allowed. -Imbalance factor should be taken care -engage banks/FIs for investing daily cash balance |
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Summary of Responses to the Case Study Questionnaire*
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Sr. |
Item |
Special Category States |
Non-special Category States |
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1 |
2 |
3 |
4 |
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Overdraft |
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1 |
During 2000-01 and 2001-02, the State took recourse to which of the following assistance from the Central Government - Special grants from the Centre, Special WMA, advance devolutions, loan or advance loan from the Central Government or advance against small savings |
Resorted to - |
Resorted to- |
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2 |
Please indicate whether the year-end budgetary position/deficit of the State was covered by (a) WMA and OD, (b) borrowings, (c) other borrowings, such as, negotiated loans, (d) increase in Public Accounts from Corporations or others, (e) unpaid bills, and (f) any other method. |
Deficit was covered by WMA and OD |
Deficit was covered by normal central plan assistance, State's share of Central taxes, revenue deficit grant, and the loan against small savings and tax devolutions. |
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Cash Management |
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1 |
What are the existing systems of forecasting month-wise – revenue and expenditure ? |
Cashflow statements and previous trends. |
Historical data, current targets and tendencies, trend analysis, and general performance of the economy. |
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2 |
What are the difficulties faced by the State in forecasting, month-wise - revenue and expenditure ? |
Uneven and uncertain inflows. |
Difficulty in forecasting arise out of inflows from Government of India and daily expenditure. Devolution of Central taxes has been fluctuating. |
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3 |
In case of monthly mismatch, what corrective measures are undertaken? |
Resort to WMA, OD, delay expenditure, or seek advance release of Central dues. |
Deferring or prioritizing expenditure and rescheduling market borrowing programme. |
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4 |
What are the major mismatches which are not or cannot be forecasted? |
Large payments against debt servicing, expenses on elections and natural calamities. |
Major mismatches are on account of delay in receipt of central share of taxes, other central releases and natural calamities. |
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5 |
What is the set-up of cash management in the State? What is the infrastructure set up for efficient cash management in the State? How are cash management decisions undertaken and what type of machinery exists for decision making in the State. |
Cash management is done through daily review of cash balances, monthly release of financial ceilings against specific heads of account. |
Computerisation is being taken up for efficient cash management. |
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6 |
How to make improvements in MIS to help the State in better cash management? |
By computerisation. |
By computerising treasuries and linking AG offices and Finance Departments with banks and daily monitoring of receipts and payments into the State's account |
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List of Officials/Experts met by the Committee
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Assam |
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Punjab |
Minimum Balance and Ways and Means Advances
to the State Governments: A Historical Review
Prior to the inauguration of Provincial Autonomy on April 1, 1937, Reserve Bank’s relations with the then Provincial Governments were not direct; the Bank dealt solely with the Central Government, and the latter was responsible for meeting the ways and means requirements of the Provincial Governments. With the introduction of Provincial Autonomy, each Province was required to open a separate account with the Reserve Bank, and accordingly, in terms of Section 21 of the Act (then in force), the Bank entered into separate agreements with the Provinces, which set out the terms and conditions on which the Bank agreed to transact the banking business of the respective Provincial Government. This change-over entailed several important questions of principle, particularly with reference to the method by which the ways and means requirements of the Provinces were to be met. These problems were examined by the Central Government, the Provincial Governments, and the Reserve Bank at a conference held in August 1936. In order to give time to the new autonomous Provinces to acquire the necessary experience in framing their ways and means requirements, it was decided that the Central Government should remain responsible for these requirements of the Provinces for the financial year 1937-38. From April 1, 1938, each Provincial Government assumed full responsibility for its own ways and means requirements and also agreed to keep a specified minimum balance with the Reserve Bank. The Provinces were required to meet any temporary deficits in their minimum balances either by issuing their own Treasury bills or by obtaining ways and means advances (WMA) from the Reserve Bank.
2. The minimum balances were fixed in 1937 on the basis of the ratio in which the total revenue and expenditure of the Government concerned bore to the total revenue and expenditure of the pre-provincial autonomy Central Government. The Finance and Revenue Accounts of the three years 1931-32 to 1933-34 were considered for this purpose. The minimum balances so fixed also represented the maximum limits upto which the States could draw as Ways and Means Advances (WMA).
With the coming into force in January 1950 of the Constitution of India, the Reserve Bank of India Act was amended in 1951 by the insertion of Section 21A which authorised the Bank to act, by agreement, as banker to the States. With the reorganisation of States, their classification into Part A, Part B and Part C States disappeared and except in regard to certain Union Territories, all States were placed on the same footing. Accordingly, the basis of the relation of the Bank with all States was also made uniform and the new Section 21A, as amended by the States Reorganisation Act, 1956, laid down that the Bank’s right or duty to act as the banker to the States was to be under agreement with them.
1953 Review
3. The minimum balances were found to be inadequate by the Bank in 1953 on the basis of the revenue and expenditure of State Governments. The State Governments had also availed of WMA considerably in excess of the prescribed limits to meet the gap between revenue and expenditure. A revision of the minimum balances and WMA limits was, therefore, undertaken in 1953. The basis which was adopted for arriving at the revised minimum balances was as under:
- The minimum balances of Part A States, fixed in 1937, were increased by the ratio of the increase in the total amount of the average revenue and expenditure charged to revenue in the years 1948-49 to 1950-51 to the total amount of revenue and expenditure charged to revenue in the three years 1931-32 to 1933-34.
- The minimum balances of Part B States were similarly arrived at on the basis of the revenue and revenue expenditure in the two years 1949-50 and 1950-51.
4. The total minimum balances on this basis amounted to Rs.8.70 crore as against a sum of about Rs.1.95 crore stipulated earlier in 1937. In order to avoid any strain on the resources of State Governments, it was decided that the minimum balances should roughly be doubled so as to increase the total for all the States to about Rs.4.00 crore. This was made effective from April 1, 1953. The limits for WMA were also liberalized for the first time with effect from April 1, 1953 and were fixed at twice the minimum balance. The minimum balances fixed in 1953 were modified at the time of reorganization of the States but no major changes were made.
1967 Review
5. In the Conference of the Chief Ministers in July 1966 on the question of preventing unauthorized overdrafts by the State Governments in their accounts with the Bank, the issue of revision of minimum balances and WMA of the State Governments were discussed. It was considered neither necessary nor appropriate to relate the minimum balances of the State Governments or their WMA limits to the revenue or revenue and expenditure as was done till 1953.A new formula for the determination of minimum balances and the WMA limits was, therefore, devised on the following basis.
6. The total of minimum balances required to be maintained with RBI by all the State Governments in India was increased in the ratio in which the total notional pre-decentralisation minimum balance of the Government of India increased during the period 1937 to 1967. As the working balance of the Central Government with RBI had increased from Rs.10 crore in 1937 to Rs.50 crore, the State Governments’ balances with RBI, as fixed originally in 1937, were also increased to five times the original figure. The total balances of all the States which worked out to Rs.1.85 crore in 1937, were notionally fixed at Rs.2.54 crore consequent on reorganization of the States. It was, therefore, decided that the total minimum balances of State Governments based on the above formula be increased to Rs.12.70 crore in 1967 and then the amount be distributed to the States in the proportion of the revenue and expenditure charged to revenue of each State to the revenue and expenditure charged to revenue of all States together (according to actuals for the year 1964-65). It was also decided to raise the limits for WMA from twice the minimum balance to thrice the minimum balance. It was not, however, considered realistic to increase the minimum balances of State Governments from about Rs.4 crore to Rs.12.70 crore immediately. The minimum balances were, therefore, first raised to Rs.6.25 crore with effect from March 1, 1967. As a result of the above changes in the minimum balances of all State Governments, total limits for clean WMA to all State Governments went up to Rs.18.75 crore.
1972 Review
7. The total minimum balances of all States were increased to Rs.6.50 crore with effect from May 1, 1972 due to fixation of minimum balances in respect of four new States, viz., Himachal Pradesh, Manipur, Meghalaya and Tripura. As a measure of assistance to the States against any temporary imbalance between receipts and expenditure on account of abnormal or unforeseen factors, the normal WMA were raised to Rs.78.00 crore from the existing level of Rs.19.50 crore as per the recommendations of the Working Group constituted to suggest ways for elimination of overdrafts.
1976 Review
8. A detailed examination was undertaken to study the feasibility of carrying out basic change in the method of determining WMA and minimum balances in 1975 in the context of enormous increase in the size of State budgets. It was recognized that any basic change in the formula would inter se alter the limits of State Governments giving rise to avoidable problems. Moreover it was not deemed desirable to devise a formula linked to expenditure of the State Governments as this would result in automatic increases in the WMA. It was observed that there were problems only in the case of a few States because of fundamental imbalances which could not be met merely by additional assistance in the form of WMA from the RBI. To the extent there was some need for increased limits, the existing structure was retained and increases agreed to within the present formula. Accordingly, the revised minimum balances and limits for normal WMA were raised to Rs.13.0 crore and Rs.130 crore (i.e., 10 times the minimum balances) respectively effective May 1, 1976.
1978 Review
9. As aggregate receipts and disbursements of States as budgeted for 1978-79 were around 26 times their level in 1963, it was felt that limits for RBI’s accommodation should be further revised. The limits for normal WMA were, therefore, raised from Rs.130 crore in 1976 to Rs.260 crore in 1978, i.e., 20 times the minimum balance effective October 1, 1978.
1982 Review
10. To eliminate the incidence of overdraft on an enduring basis which may emerge due to the increased budgetary expenditure of States, it was decided to double RBI’s accommodation. Normal WMA were thus raised from Rs.260 crore to Rs.520 crore (40 times the minimum balance) with effect from July 1, 1982.
1986 Review
11. The limits for WMA were again reviewed in August 1986. It was found that even though receipts and disbursements of States had increased substantially since 1982, when the revision of limits was last made, there was no strong evidence to show that the seasonal gaps in cash flow had increased proportionately. It was also observed that the streamlining of the release of funds by the Central Government to the States and the staggering of the repayment of loans by the States would also help the latter in avoiding serious cash flow problems in any particular month. It was also observed that only seasonal deficits and not structural deficits should be taken care of by WMA from RBI. Nevertheless, in view of representations from States, it was decided to grant a basic increase of 20 per cent over the existing normal limits. As the cash flow problem faced by States was more severe in the first half of the year than in the second half when the position improves with the receipts of money from market borrowings, an additional 10 per cent rise was granted in the first half of the year. The revised limit, effective October 1, 1986 was Rs.676 crore during April - September and Rs.624 crore during October - March.
1988 Review
12. In February 1988, a review of the WMA limits was undertaken in view of the cash flow difficulties reported by the States in incurring emergent expenditure on drought relief. In the financial year 1987-88, four States had got into an OD on several occasions and from the available data it was not possible to indicate whether the OD on each occasion was necessitated purely on account of the expenditure incurred by those States on drought relief. Besides some of the worst affected States had not got into the problem of OD as often as some others where drought relief expenditure had not been a major problem. A regular increase in the limits of WMA, to take care of the difficulties faced in one year, and that too particularly barely a year and a half after the last increase was effected, did not appear necessary. However, having regard to the time lag between expenditure on drought relief incurred which was not budgeted by State Governments and the release of Central assistance, an increase of 40 per cent in normal WMA over the limits in force prior to October 1, 1986 was granted . The limits were uniformly made applicable throughout the year instead of separate limits for the two halves of the year. The revised limits with effect from March 1, 1988 were raised to Rs.744.80 crore.It was also indicated that the above revised WMA limits should remain in force at least for a period of three years.
1993 Review
13. In view of increased liquidity stress faced by them, several States represented for revision of the limits upwards. The issue was examined and on analysis of the financial position of State Governments, the following important observations emerged: (a) majority of the States had availed of the WMA up to the full extent, (b) the number of States running into OD rose sharply and such occurrences became more frequent and for larger amounts since 1992 and (c) during the year 1992-93, all States except three emerged into OD, the period of OD in some cases was as high as 192 days during the year. The RBI suspended payments in respect of six States (payments in respect of two States had to be suspended on more than one occasion).
14. Although number of States had represented that WMA limits should be related to expenditure, a view was taken that such a link would be inappropriate as States which incur expenditure disproportionate to their receipts would be eligible for higher limits, leading to larger deficits. While the main thrust of the policy continued to disallow States to run large deficits, a pragmatic assessment warranted that genuine temporary mismatches in finances of States should be adequately met by WMA from RBI. Having regard to legitimate needs of the State for WMA and the need to maintain monetary control, it was considered desirable to increase WMA to a level where States, which were prudent, were freed from the problem of OD. It was also felt that the linking of WMA limits as multiple of the minimum balance would ensure that relativities among States were not disturbed. Based on the above consideration, normal WMA was raised to Rs.1117.20 crore, i.e., 84 times the minimum balances effective November 1, 1993.
1996 Review
15. A study of the finances of the States based on their budget documents indicated that while there was improvement in some of the major deficit indicators, certain structural weakness persisted in the form of large revenue deficits, rising interest burden, increasing distortions in the pattern of expenditure and minuscule growth in non-tax revenues. It was, however, felt that there was a need to increase WMA to State Governments so that genuine temporary mismatches in finances of State Governments could be adequately met. Having regard to legitimate needs of States, it was considered that WMA should be revised to a level where States which are managing their finances prudently are freed from getting into OD. On a realistic estimate, it was decided that doubling of existing limits for WMA would be reasonable. The limits were accordingly revised to Rs.2234.40 crore, effective August 1, 1996. Such increased limits amounted to 168 times the minimum balances.
1999 Review
16. On August 19, 1998, an Informal Advisory Committee (IAC) on Ways and Means Advances (WMA), was set up to examine the existing scheme of WMA to State Governments and consider rationalisation of limits, keeping in view, the needs of the State Governments. IAC submitted the Report in November 1998 and recommended the de-linking of WMA limits from the minimum balances and suggested that the average of last three years of revenue receipts and capital expenditure should be the base to which the WMA limits should be linked. The Committee also recommended that WMA limits for special and non-special category States should be computed separately. Accordingly, for fixing the normal WMA limits, the following methodology was adopted -
- The annual average of the total of revenue receipts and capital expenditure was calculated from the accounts for the years 1994-95, 1995-96, 1996-97, as published in the budgets of the States. In non-tax revenue receipts, the receipts on lotteries were taken on a net basis.
- The revised normal WMA limits were worked out applying the ratio of 2.25 per cent for non-special category States and 2.75 per cent for special category States to the three year average of revenue receipts plus capital expenditure of the remaining States.
- Given the problems of adjustment in the short run, it was considered desirable that for no State the increase in normal WMA limit should be less than forty per cent over the existing limits.
The revised normal WMA limits of Rs.3941 crore were made effective March 1, 1999.
2001 Review
17. Issues raised by several State Governments to liberalise the WMA and OD scheme were discussed in detail in the conference of State Finance Secretaries held on November 3 and 4, 2000 at RBI. It was decided in that Conference that the implementation of WMA facility/OD Regulation Scheme, as per the recommendations of IAC, should be looked into by an Informal Group of State Finance Secretaries (GFS). Accordingly, GFS consisting of Finance Secretaries of five States, (viz., Andhra Pradesh, Kerala, Manipur, Uttar Pradesh and West Bengal) was constituted. The Group submitted its Report to the RBI on January 3, 2001.
18. Based on the recommendations of GFS, the revised WMA Scheme, which was called "WMA Scheme 2001" ,came into effect from February 1, 2001. It was decided by RBI that the scheme would be reviewed in its entirety at the end of two years with a view to bringing the revisions into effect from the third year, viz., April 1, 2003. It was also decided that the normal WMA limits would be worked out taking into account the three years’ average of revenue receipts and capital expenditure for fiscal years 1997-98, 1998-99 and 1999-2000 and to this base a ratio of 2.4 per cent would be applied for the non-special category States and 2.9 per cent for the special category States. Accordingly, the total revised normal WMA limits worked out to Rs.5,283 crore as against the then current limit of Rs.3,941 crore representing an increase of Rs.1,342 crore or about 34 per cent.
Annual Revision of WMA limits in 2002
19. As per the recommendation of the GFS that the ratio be fixed but, with the change in the base, the limits be revised annually, the revised WMA limits were computed for the year 2002-03. In respect of the reorganized States the data for 1998-99 and 1999-2000 have been apportioned between the existing and new State according to the revenue sharing formula. For 2000-01, in respect of the new States, viz., Uttaranchal, Chattisgarh and Jharkhand, the five month data (November 200 - March 2001) supplied by the States has been added to the seven month data derived from the data of the parent State (viz., UP, MP and Bihar respectively) on a proportionate basis using the revenue sharing formula. The data for 2000-01 for the parent States has been correspondingly reduced. Uttaranchal, which during the last revision was a non-special category State, was subsequently been brought under the special category. Consequently, its WMA limit was calculated with reference to the ratio of 2.9 per cent. All the proposed limits were rounded off to the next higher multiple of 5 with a minimum limit of Rs.50 crore for any State. Accordingly, the revised limits of WMA for the States rose from Rs.5,283 crore to Rs.6,035 crore, effective April 1, 2002.
20. The movements in minimum balances and the WMA limits are furnished in the Appendix.
Appendix: Minimum Balances and Limits of WMA of State Governments
(Rupees crore) |
Date |
Minimum Balance (Total for all States |
WMA limits (expressed as a multiple of the minimum balance) |
||
Normal / Clean |
Special/ Secured |
|||
1 |
2 |
3 |
4 |
|
1. |
April 1, 1937 (effective April 1, 1938) (Provincial Government / Part A States) |
1.95 |
1 |
* |
2. |
April 1, 1953 (Part A and Part B States) |
|
2 |
2.00 for each State |
3. |
March 1, 1967 |
6.25 |
3 |
6 |
4. |
May 1, 1972 |
6.50 + |
12 |
6 |
5. |
May 1, 1976 |
13.0 |
10 |
10 |
6. |
October 1, 1978 |
13.0 |
20 |
10 |
7. |
July 1, 1982 |
13.0 |
40 |
20 |
8. |
October 1, 1986 |
|||
a) April – September |
13.0 |
52 |
20 |
|
b) October – March |
13.0 |
48 |
20 |
|
9. |
March 1, 1988 |
13.30 ## |
56 |
20 |
10. |
November 1, 1993 |
13.30 |
84 |
32 |
11. |
August 1, 1996 |
13.30 |
168 |
64 |
12. |
March 1, 1999 |
41.04** |
(3,941.00)# |
++ |
13. |
February 1, 2001 |
41.04 |
(5,283.00) |
++ |
14 |
April 1, 2002 |
41.04 |
(6,035.00) |
++ |
Figures in brackets in columns 3 and 4 are the total monetary limits for all the States
* Secured Ways and Means Advances were occasionally granted on an ad hoc basis.
+ The increase of Rs.0.25 crore over the figure for 1967 was due to the fixation of minimum balances for four States viz. Himachal pradesh, Manipur, Meghalaya and Tripura. There was no revision for other States.
** The minimum balance revised upwards linking it to the same base as for WMA. The base for the revised WMA limits will be three- yea average of revenue receipts plus capital expenditure.
++ The limits for special WMA liberalised, no upper limit on Special WMA, which is being provided against the actual holdings of Central Government Securities.
# The aggregate amount applicable in March 1999 was Rs.3,685 crore on the basis of the recommendation of IAC. On bifurcation of Bihar, Madhya Pradesh and Uttar Pradesh, interim limits were granted to the six recognized States effective November 2000.
##Joining of Goa raised the minimum balance by Rs.0.30 crore.
Special Ways and Means Advances: A Historical Review
The State Governments are sanctioned Special Ways and Means Advances based on their holdings in Government of India (GOI) dated securities/ Treasury Bills since 1953. The States are free to participate in 91 and 364 day Treasury Bills auctions as well as those of GOI dated securities as non-competitive bidders for investment of their durable surplus and also re-invest the maturity proceeds of the existing holdings in GOI dated securities/Treasury Bills. Against these holdings, State Governments were allowed advances subject to the ceiling amount arrived at multiples of the minimum balances.
The ceilings on Special WMA
2. In 1953, a limit of Rs.2.00 crore against the pledge of Central Government securities was granted to each State as special or secured advances over and above the normal WMA. This limit was not rigorously enforced and special advances in excess of Rs.2 crore were on occasions granted. In 1967, the limits were revised to twice the level of normal WMA and amounted to Rs.37.50 crore. The limits were raised to 10 times the revised minimum balances to Rs.130 crore with effect from May 1, 1976. In 1982, the limits were again raised to Rs.260 crore 20 times the minimum balance). In 1988, with a increase in minimum balance due to joining of Goa, amount of Special WMA was raised to Rs.266 crore though there was no change in the multiple of minimum balance. In 1993 and 1996, the limits were raised substantially to Rs.425.60 crore and 851.20 crore implying 32 times and 64 times of the minimum balances, respectively.
Liberalisation by the IAC
3. The scheme of Special WMA was liberalized and such ceiling was removed following the implementation of the recommendations of the IAC in 1999. Since 1999 the limits are directly proportional to the holdings by the State Governments in the GOI dated securities and Treasury Bills with no ceiling. The limits for Special WMA are revised by RBI on a quarterly basis, taking into account the market prices of the securities as on the last day of the immediate preceding quarter. In case of variation in the holdings of Treasury Bills, the limits are revised immediately.
Margin
4. The margins presently applicable are five per cent for market risk and additional five per cent for securities with residual maturity of less than 10 years or 10 per cent for securities with residual maturity of more than 10 years.
Thus, the limits effectively work out to around 90 per cent and 85 per cent of the market price of the holdings with less than 10 years residual maturity and 10 years or more residual maturity respectively. The underlying rationale for discrimination of limits on the basis of tenor was that the risk sensitivity in case of fluctuations of prices of securities is more for long-term dated securities than for short-term dated securities.
Overdrafts of State Governments: A Historical Review
States’ overdrafts (OD) with Reserve Bank of India (RBI) represent their drawals exceeding the authorized limits of WMA, both normal and special. Such OD is not reckoned in the monetary and credit arrangement for the year and continued usage of the instrument is likely to disturb the principle of distributive justice amongst the States. Avoidance of situations leading to OD was to an extent facilitated by the progressive enhancement in the limits for authorized accommodation by way of normal and special WMA limits. Also, the Central Government has regularly been providing resources to the States to recover from the OD with the RBI. Nevertheless, OD persists.
2. The OD regulation scheme was first introduced in 1972. Since then, the schemes has regularly been revisited. The salient features of these schemes have been described below:
Overdraft Regulation Scheme, 1972
3. The Ce ntral Government was concerned with the disquieting trend in the size of OD which some of the States were having with the RBI. Despite the Central Government’s efforts to bridge the non-Plan gaps of certain States through special assistance, the OD of the State Governments with the RBI continued to increase and reached a record level of Rs.642 crore at the end of April, 1972. The Central Government helped to clear them by giving the States WMA to the extent of Rs.416 crore and by advance release of Plan assistance and share in the divisible tax pool due to them. Under the new procedure introduced with effect from May 1, 1972, no OD was allowed by RBI except for a purely temporary period of seven days. In case, a State Government’s overdraft continued to exceed seven days, suspension of payment on behalf of the concerned State Government became automatic.
Overdraft Regulation Scheme, 1978
4. States again reverted to OD from 1974 onwards. The Centre had to regularly provide assistance to States to clear their OD as the States were not doing enough to raise resources. To avoid a recurrence of such OD, the Central Government, the Planning Commission and the RBI worked out a regulated system of overdrafts which came into effect from October 1, 1978. Under this scheme, Centre granted special medium-term non-Plan loans amounting to Rs.555 crore to 11 States to clear their OD with RBI. It was also decided that if a State Government was indebted to RBI for more than 45 days even within the limits of the WMA, the position would be discussed with the concerned State Government to devise such corrective measures as may be called for. As soon as any State Government availed itself of 75 per cent of the authorised WMA limit, RBI would caution the State Government. If, despite caution, the State Government’s account continued to be overdrawn for more than seven working days, RBI would automatically suspend payments of the State Governments which would not be resumed until the OD has been cleared.
Overdraft Regulation Scheme, 1982
5. The accumulated deficits of the States had amounted to Rs.1,743 crore in 1981-82 and it became imperative to take steps to prevent continuation of this practice. The States, which had over-drawn their accounts with the RBI persistently, were advised to take effective steps immediately so as to ensure clearance/avoidance of the ODs. In order to bring about the much-needed financial discipline among the States, the Government of India, in consultation with RBI, evolved a package of measures to enable the States to clear their ODs from July 1, 1982. States were granted Rs.1,743 crore by way of medium-term loans to clear their closing deficits as on March 31, 1982. These loans were for a period 10 years in case of special category States and for five years in respect of other States, excluding a moratorium of one year on repayment of principal and interest. The States were also provided with additional amount of Rs.787 crores as short-term assistance to clear the additional deficits incurred by them between April 1, 1982 and June 30, 1982. This assistance, which was in the form of advance release of Central transfers was, however, to be adjusted during the course of the current year.
Overdraft Regulation Scheme, 1985
6. Despite the assistance given by the Government of India in 1982 and the Overdraft Regulation Scheme introduced from May 1, 1972 there had been widespread recourse to OD regularly by a number of States. In addition to the increased limits on WMA from the Reserve Bank, the Government of India had to provide ad hoc assistance, on a number of occasions, to State Governments to clear their OD with the RBI.
7. The recurrence of OD encouraged Government of India, to evolve a scheme with RBI. Under the Scheme, the Centre extended on October 1, 1985 medium-term loans of Rs.1,628.01 crore to 17 States, equal to 90 per cent of their OD as on January 28, 1985 with the balance was left to be cleared by the States themselves through their own efforts. All the ODs were cleared on October 1, 1985. The Centre then advised the States that thereafter they should have no OD with the RBI and in case any OD appeared in any State Government account and remained beyond seven continuous working days, the RBI would stop payments on that Government’s account.
Overdraft Regulation Scheme – Liberalisation in 1993
8. The Overdraft Regulation Scheme, 1985 worked satisfactorily. Based on the representations from certain State governments, RBI introduced some flexibility in the above scheme by enhancing the period for which a State government could run on OD from seven working days to 10 working days with effect from November 1, 1993.
Overdraft Regulation Scheme 1999
9. The Overdraft Regulation Scheme which was made applicable to the State Governments with effect from April 1, 1999, as per the recommendations of the IAC was as under:
- No State shall be allowed to run an OD with the RBI for more than 10 consecutive working days. In case the OD appears in the State’s account and remains beyond 10 consecutive working days, RBI and its agencies shall stop payments on behalf of the State.
- The OD shall not exceed 100 per cent of the normal WMA limit for more than three days. On the first occasion of such excess drawal beyond three days in a financial year the RBI shall advise the State that the OD amount should not exceed 100 per cent of normal WMA limit on any subsequent occasion.
- Without prejudice to clause (a) above, if during the financial year the amount of OD exceeds 100 per cent of WMA limit on a second or any subsequent occasion, the State shall be given only three working days notice to bring down the OD amount within the level of 100 per cent of normal WMA limit. If this is not adhered to, payments will be stopped.
10. As a measure of discipline, IAC had recommended that no State shall be allowed to run an OD with RBI for more than 20 working days during a quarter in a financial year and in case, this limit exceeded, RBI shall stop payments. The number of working days during which the payments have been suspended shall not be taken into account in calculating the 20 working days. For this purpose the financial year shall be divided into four quarters commencing on April 1, July 1, October 1 and January 1. However, while other recommendations were accepted, implementation of the above suggestion to restrict number of overdraft in a quarter to 20 working days was deferred for two years, i.e., upto April 2001.
Overdraft Regulation Scheme 2001
11. Keeping in view the recommendations of the GSF and the difficulties represented by the States in regard to cash flow management, it was decided to increase the 10 working days limit in OD to 12 working days as an ad-hoc measure subject to review. Furthermore, as recommended by the Group, for facilitating cash flow management, it has been decided to extend the duration of three days within which a State has to bring down the OD level within the level of 100 per cent normal WMA limit to five days. Implementation of the recommendation of the IAC that no State shall be allowed to run OD with RBI for more than 20 working days during a quarter in a financial year was deferred again for another year.
Interest Rates on WMA and OD - Historical Trend
Sr.No |
Period |
Normal WMA |
Special WMA |
OD |
1 |
2 |
3 |
4 |
5 |
1 |
Prior to March1967 |
1% below Bank Rate |
i) Up to Rs.50 lakh -¼% below Bank Rate |
Bank Rate |
2 |
March 1967 to April 1976 |
1% below Bank Rate |
1% below Bank Rate |
Bank Rate |
3 |
May 1976 to August 1996 |
i) First 90 days - 1% below Bank Rate |
i) First 90 days - 1% below Bank Rate |
1) For 7 days Bank Rate |
4 |
August 1, 1996 to January 15, 1998 |
Bank Rate |
Bank Rate |
Bank Rate plus 3% |
5 |
Jan 16, 1998 to March 18, 1998 |
2% below Bank Rate |
2% below Bank Rate |
Bank Rate |
6 |
March 19, 1998 to April 2, 1998 |
1.5% below Bank Rate |
1.5% below Bank Rate |
0.5% above Bank Rate |
7 |
April 3 to April 28, 1998 |
1% below Bank Rate |
1% below Bank Rate |
1% above Bank Rate |
8 |
April 29, 1998 to the present |
Bank Rate |
Bank Rate |
2% above Bank Rate |
WMA, Special WMA, Overdraft and Investment in Intermediate Treasury Bills- Weekly Averages
(Rs. crore) |
Month |
Normal WMA |
Special WMA |
Overdraft |
Investment in Intermediate Treasury Bills |
||||||||||||
1999-2000 |
2000-01 |
2001-02 |
2002-03 |
1999-2000 |
2000-01 |
2001-02 |
2002-03 |
1999-2000 |
2000-01 |
2001-02 |
2002-03 |
1999-2000 |
2000-01 |
2001-02 |
2002-03 |
|
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
12 |
13 |
14 |
15 |
16 |
17 |
April |
1,175 |
2,288 |
3,925 |
2,924 |
176 |
767 |
666 |
835 |
1,420 |
2,392 |
1,863 |
2,987 |
6,322 |
1,481 |
2,832 |
1,652 |
May |
1,091 |
1,610 |
2,638 |
2,961 |
155 |
496 |
345 |
480 |
174 |
469 |
681 |
1,428 |
6,560 |
1,610 |
3,483 |
2,404 |
June |
1,198 |
1,464 |
2,223 |
3,007 |
333 |
478 |
331 |
559 |
183 |
467 |
508 |
1,022 |
6,761 |
2,550 |
4,664 |
3,670 |
July |
1,663 |
2,376 |
2,875 |
3,295 |
429 |
879 |
491 |
658 |
397 |
546 |
863 |
1,252 |
5,619 |
1,486 |
4,219 |
2,727 |
August |
1,377 |
1,775 |
2,798 |
2,058 |
333 |
344 |
539 |
507 |
316 |
368 |
911 |
817 |
6,110 |
3,170 |
2,916 |
4,367 |
September |
1,215 |
1,791 |
3,542 |
2,875 |
135 |
535 |
760 |
610 |
286 |
460 |
1,851 |
924 |
6,644 |
3,190 |
1,764 |
4,389 |
October |
1,742 |
2,554 |
3,586 |
3,238 |
516 |
681 |
652 |
709 |
518 |
935 |
1,693 |
1,860 |
5,485 |
1,645 |
1,704 |
3,156 |
November |
2,087 |
2,770 |
3,730 |
3,673 |
758 |
602 |
769 |
704 |
784 |
983 |
1,990 |
1,575 |
3,398 |
1,244 |
1,595 |
2,396 |
December |
2,055 |
2,387 |
4,244 |
4,454 |
723 |
806 |
950 |
833 |
895 |
921 |
2,292 |
1,407 |
2,630 |
2,066 |
1,232 |
2,440 |
January |
2,456 |
2,862 |
4,217 |
945 |
927 |
951 |
1,053 |
1,058 |
2,024 |
1,571 |
1,808 |
1,067 |
||||
February |
2,458 |
3,398 |
3,506 |
810 |
583 |
922 |
1,003 |
765 |
1,733 |
1,690 |
2,678 |
1,437 |
||||
March |
2,366 |
3,481 |
3,746 |
853 |
704 |
839 |
1,863 |
2,109 |
2,447 |
1,319 |
2,726 |
955 |
||||
Major Fiscal Indicators of States - Aggregate Position
(Rs. crore) |
Year |
Gross |
Revenue |
Capital |
Net |
Loans from |
Market |
Special |
Others# |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
1990-91 |
18,787 |
5,309 |
9,223 |
4,255 |
9,978 |
2,556 |
6,253 |
|
1995-96 |
31,426 |
8,201 |
1,895 |
4,731 |
14,801 |
5,888 |
10,737 |
|
1997-98 |
44,200 |
16,333 |
22.802 |
5,065 |
23,676 |
7,280 |
13,244 |
|
1998-99 |
74,254 |
43,642 |
23,072 |
8,045 |
31,057 |
10,467 |
32.730 |
|
1999-00 |
91,480 |
53,797 |
25,512 |
12,171 |
12,408* |
12,663 |
66,409 |
|
2000-01 |
87,279 |
51,315 |
25,512 |
12,171 |
8,254* |
12,519 |
31,704 |
34,802 |
2001-02 (RE) |
1,06,595 |
60,540 |
38,333 |
7,721 |
13,287* |
16,074 |
36,200 |
41,034 |
2002-03 (BE) |
1,03,736 |
49,112 |
43,684 |
10,940 |
18,548* |
11,845 |
37,899 |
35,445 |
# Includes loans from Financial Institutions, Provident Funds, Reserve Funds, Deposits and Advances, etc. |
||||||||
Major Fiscal Indicators of States - Growth Rates
(Amount in Rs. crore; rate in per cent) |
Year |
Revenue |
Revenue |
Capital |
Capital |
Interest Payments |
1 |
2 |
3 |
4 |
5 |
6 |
1997-98 |
170300 |
186634 |
59937 |
41501 |
30113 |
1998-99 |
176448 |
220090 |
86393 |
46271 |
35874 |
1999-00 |
207201 |
260998 |
103575 |
52891 |
45172 |
2000-01 |
237953 |
289268 |
111591 |
55670 |
51576 |
2001-02(RE) |
270885 |
331440 |
123532 |
70131 |
64502 |
2002-03(BE) |
306932 |
355166 |
118812 |
75768 |
72285 |
Annual Average Growth Rate (1997-98 to 2002-03) |
12.30 |
15.44 |
19.82 |
14.02 |
20.98 |
Interest Burden on States
Year |
Interest |
Interest Payment as percentage of |
||
Revenue |
Revenue |
GDP |
||
| 1 | 2 |
3 |
4 |
5 |
1990-91 |
8,655 |
9.52 |
13.02 |
1.52 |
1995-96 |
21,933 |
12.35 |
16.03 |
1.85 |
1998-99 |
35,874 |
13.48 |
20.33 |
2.06 |
1999-00 |
45,526 |
14.26 |
21.97 |
2.36 |
2000-01 |
51,576 |
17.83 |
21.67 |
2.47 |
2001-02 |
64,502 |
19.46 |
23.81 |
2.79 |
Select Fiscal Indicators-State wise Position
(Rs.crore) |
Sr. No. |
States |
1997-1998 |
1999-2000 |
2000-01(RE) |
||||||||||||
Gross Fiscal Deficit |
Revenue Deficit |
Revenue Receipts |
Revenue Expen-diture |
Aggregate Expen-diture |
Gross Fiscal Deficit |
Revenue Deficit |
Revenue Receipts |
Revenue Expen-diture |
Aggregate Expen-diture |
Gross Fiscal Deficit |
Revenue Deficit |
Revenue Receipts |
Revenue Expen-diture |
Aggregate Expen-diture |
||
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
12 |
13 |
14 |
15 |
16 |
17 |
Non-Special Category States |
||||||||||||||||
1 |
Andhra Pradesh |
2428 |
703 |
13841 |
14544 |
17745 |
4976 |
1233 |
16805 |
18038 |
22767 |
7209 |
3113 |
19717 |
22830 |
28029 |
2 |
Bihar |
981 |
264 |
8693 |
8957 |
10216 |
6108 |
3550 |
12579 |
16128 |
19548 |
4884 |
2961 |
11385 |
14345 |
16946 |
3 |
Chhattisgarh |
331 |
2248 |
2229 |
2683 |
|||||||||||
4 |
Goa |
125 |
14 |
1108 |
1122 |
1270 |
341 |
209 |
1228 |
1437 |
1614 |
496 |
207 |
1559 |
1766 |
2118 |
5 |
Gujarat |
3175 |
1018 |
11125 |
12143 |
14875 |
6792 |
3617 |
13900 |
17517 |
21466 |
8422 |
6859 |
16371 |
23230 |
28330 |
6 |
Haryana |
1128 |
719 |
5898 |
6617 |
7805 |
2133 |
1185 |
5767 |
6952 |
8359 |
2406 |
1033 |
7036 |
8069 |
9752 |
7 |
Jharkhand |
0 |
||||||||||||||
8 |
Karnataka |
1610 |
277 |
10613 |
10890 |
12601 |
4276 |
2325 |
12907 |
15232 |
17818 |
4148 |
2175 |
14912 |
17087 |
19740 |
9 |
Kerala |
2414 |
1123 |
7118 |
8241 |
9818 |
4537 |
3624 |
7942 |
11566 |
12900 |
4364 |
3232 |
9332 |
12564 |
14185 |
10 |
Madhya Pradesh |
1821 |
469 |
11257 |
11726 |
14225 |
3911 |
2932 |
13204 |
16136 |
17957 |
3662 |
2205 |
13792 |
15997 |
18065 |
11 |
Maharashtra |
6442 |
2580 |
20317 |
22897 |
27675 |
11706 |
4269 |
25269 |
29538 |
38244 |
9993 |
6224 |
30271 |
36495 |
43927 |
12 |
Orissa |
1803 |
905 |
4632 |
5537 |
6854 |
3746 |
2574 |
5885 |
1357 |
10120 |
3005 |
1657 |
7511 |
9168 |
11157 |
13 |
Punjab |
2478 |
1484 |
6351 |
7835 |
9472 |
3195 |
2727 |
7468 |
10195 |
11980 |
4460 |
2573 |
10289 |
12862 |
15728 |
14 |
Rajasthan |
2552 |
582 |
8404 |
8986 |
12685 |
5361 |
3640 |
9790 |
13430 |
16256 |
4797 |
2610 |
12507 |
15117 |
18050 |
15 |
Tamil Nadu |
2122 |
1364 |
13587 |
14951 |
17333 |
5382 |
4400 |
16328 |
20728 |
22627 |
5781 |
3922 |
18396 |
22318 |
25143 |
16 |
Uttar Pradesh |
7576 |
4624 |
17571 |
22195 |
26626 |
11099 |
7253 |
21495 |
28748 |
34615 |
12279 |
5819 |
27624 |
33443 |
42541 |
17 |
West Bengal |
4008 |
2294 |
9028 |
11322 |
13557 |
11666 |
9287 |
10211 |
19498 |
22678 |
11221 |
7411 |
15581 |
22992 |
28015 |
Special Cetagory States |
||||||||||||||||
18 |
Arunachal Pradesh |
121 |
-172 |
837 |
665 |
972 |
59 |
-199 |
1020 |
821 |
1098 |
225 |
114 |
1136 |
1022 |
1383 |
19 |
Assam |
142 |
-287 |
4326 |
4039 |
5022 |
1606 |
1005 |
4841 |
5846 |
7086 |
1923 |
757 |
6871 |
7628 |
10194 |
20 |
Himachal Pradesh |
1202 |
529 |
2170 |
2699 |
3453 |
190 |
106 |
3715 |
3822 |
4714 |
1574 |
848 |
3351 |
4199 |
5135 |
21 |
Manipur |
188 |
-65 |
863 |
798 |
1133 |
656 |
287 |
1070 |
1357 |
1780 |
231 |
13 |
1282 |
1269 |
1759 |
22 |
Meghalaya |
127 |
-12 |
697 |
685 |
851 |
209 |
-16 |
944 |
928 |
1195 |
280 |
44 |
1237 |
1192 |
1561 |
23 |
Mizoram |
124 |
-60 |
722 |
662 |
870 |
179 |
-59 |
954 |
894 |
1161 |
198 |
23 |
1082 |
1059 |
1311 |
24 |
Nagaland |
204 |
11 |
993 |
1004 |
1230 |
249 |
36 |
1144 |
1180 |
1495 |
359 |
0 |
1420 |
1420 |
1836 |
25 |
Tripura |
196 |
-22 |
1082 |
1060 |
1350 |
290 |
23 |
1438 |
1461 |
1773 |
427 |
72 |
1777 |
1850 |
2255 |
26 |
Uttaranchal |
|
||||||||||||||
Source: RBI, State Finances- A Study of Budgets, Various Issues |
||||||||||||||||
Select Indicators of Fiscal Stress – State wise position
Sr. |
States |
RD/GFD (per cent) |
Ratio of AE over RR |
||
1999-2000 |
2000-01 |
1999-00 |
2000-01 (RE) |
||
1 |
2 |
3 |
4 |
5 |
6 |
Non-Special Category States |
|||||
1 |
Andhra Pradesh |
24.8 |
43.2 |
1.35 |
1.42 |
2 |
Bihar |
58.1 |
60.6 |
1.55 |
1.49 |
3 |
Goa |
61.3 |
41.8 |
1.31 |
1.36 |
4 |
Gujarat |
53.3 |
81.4 |
1.54 |
1.73 |
5 |
Haryana |
55.6 |
42.9 |
1.45 |
1.39 |
6 |
Karnataka |
54.4 |
52.4 |
1.38 |
1.32 |
7 |
Kerala |
79.9 |
74.1 |
1.62 |
1.52 |
8 |
Madhya Pradesh |
75.0 |
60.2 |
1.36 |
1.31 |
9 |
Maharashtra |
36.5 |
62.3 |
1.51 |
1.45 |
10 |
Orissa |
68.7 |
55.1 |
1.72 |
1.49 |
11 |
Punjab |
85.4 |
57.7 |
1.60 |
1.53 |
12 |
Rajasthan |
67.9 |
54.4 |
1.66 |
1.44 |
13 |
Tamil Nadu |
81.8 |
67.9 |
1.39 |
1.37 |
14 |
Uttar Pradesh |
65.3 |
47.4 |
1.61 |
1.54 |
15 |
West Bengal |
79.6 |
66.0 |
2.22 |
1.80 |
16 |
Chhattisgarh |
- |
- |
- |
- |
17 |
Jharkhand |
- |
- |
- |
- |
Special Category States |
|||||
1 |
Arunachal Pradesh |
-335.3 |
-50.9 |
1.08 |
1.22 |
2 |
Assam |
62.6 |
39.4 |
1.46 |
1.48 |
3 |
Himachal Pradesh |
56.0 |
53.9 |
1.27 |
1.53 |
4 |
Manipur |
43.8 |
-5.4 |
1.66 |
1.37 |
5 |
Meghalaya |
-7.6 |
-15.8 |
1.27 |
1.26 |
6 |
Mizoram |
-33.1 |
-11.4 |
1.22 |
1.21 |
7 |
Nagaland |
14.6 |
0.1 |
1.31 |
1.29 |
8 |
Tripura |
7.8 |
16.9 |
1.33 |
1.27 |
9 |
Uttaranchal |
- |
- |
- |
- |
* In absence of Actuals, BE/ RE data are used.
BE- Budget Estimates; RE - Revised Estimates; AE- Aggregate Expenditure;
RR- Revenue Receipts
Source: RBI, State Finances- A Study of Budgets, Various Issues
Computation of Average Ratios for determination of WMA Limits
Sr. No |
States |
Average Revenue |
Limits as fixed |
Column 4 |
Adjustment |
1 |
2 |
3 |
4 |
5 |
6 |
Non-Special Category States |
|||||
1 |
Andhra Pradesh |
9951.4 |
288 |
2.89 |
0.19 |
2 |
Bihar |
7404.4 |
195 |
2.63 |
0.18 |
3 |
Goa |
601.9 |
24 |
3.99 |
0.27 |
4 |
Gujarat |
8672.8 |
243 |
2.80 |
0.19 |
5 |
Haryana |
3573.7 |
99 |
2.77 |
0.18 |
6 |
Karnataka |
8356.2 |
228 |
2.73 |
0.18 |
7 |
Kerala |
5337.8 |
144 |
2.70 |
0.18 |
8 |
Madhya Pradesh |
8761.3 |
221 |
2.52 |
0.17 |
9 |
Maharashtra |
16941.7 |
483 |
2.85 |
0.19 |
10 |
Orissa |
3917.8 |
141 |
3.60 |
0.24 |
11 |
Punjab |
4837.5 |
141 |
2.91 |
0.19 |
12 |
Rajasthan |
6721.7 |
202 |
3.01 |
0.20 |
13 |
Tamil Nadu |
10577.2 |
281 |
2.66 |
0.18 |
14 |
Uttar Pradesh |
14499.3 |
531 |
3.66 |
0.24 |
15 |
West Bengal |
7482.2 |
235 |
3.14 |
0.21 |
44.87 |
2.99 |
||||
Average for Non-Special Category States |
(44.87+2.99)/15 = 3.19 |
||||
Special Category States |
|||||
1 |
Arunachal Pradesh |
722.6 |
28 |
3.87 |
0.21 |
2 |
Assam |
3397.4 |
114 |
3.36 |
0.18 |
3 |
Himachal Pradesh |
1683.5 |
59 |
3.50 |
0.19 |
4 |
Manipur |
697.3 |
25 |
3.59 |
0.20 |
5 |
Meghalaya |
648.2 |
25 |
3.86 |
0.21 |
6 |
Mizoram |
611.1 |
25 |
4.09 |
0.22 |
7 |
Nagaland |
760.2 |
26 |
3.42 |
0.19 |
8 |
Tripura |
902.5 |
31 |
3.43 |
0.19 |
29.12 |
1.59 |
||||
Average for Special Category States |
(29.12+1.59)/8 = 3.84 |
||||
* Adjustment Factor – For Non-Special Category States: 0.15/2.25 = 6.67%
For Special Category States : 0.15/2.75 = 5.45%
റിസർവ് ബാങ്ക് ഓഫ് ഇന്ത്യ മൊബൈൽ ആപ്ലിക്കേഷൻ ഇൻസ്റ്റാൾ ചെയ്ത് ഏറ്റവും പുതിയ വാർത്തകളിലേക്ക് വേഗത്തിലുള്ള ആക്സസ് നേടുക!
