BHUBANESWAR: Even as preparation is on in full swing to present the next annual Budget in the third week of February, the State Government has once again gone to open market to borrow Rs 1,000 crore to meet some of its committed expenditure. The loan will be raised through sale of government securities of 6 years tenure. It will be repaid at par on January 17, 2014.
“The proceeds of the loan will be utilised for financing development programmes and projects sanctioned by the Government. Permission of the Central Government has been obtained for the loan,” sources in the Finance Department said.This is the eighth time the State Government has gone to the market for borrowing in the current financial year. With the fresh loan, the total market borrowing of the State will be Rs 6,500 crore, sources said.
The State which was revenue surplus till 2013-14 resorted to market borrowing from 2014-15. The loan is being incurred for capital expenditure on infrastructure projects.A recent review of the fiscal performance by Chief Secretary AP Padhi showed that the review income of the State from, both own tax and non-tax by December 2017 end, was 23.33 per cent more than the corresponding period last year.
It is expected that the State’s debt burden is likely to touch around Rs 77,000 crore by the end of 2017-18 fiscal. The debt burden of the State is around 16.39 per cent of the Gross State Domestic Product, which is well below the permissible limit of 25 per cent, sources said.The Government stock will be sold through auction by Reserve Bank of India (RBI), Mumbai, on January 16, at a coupon rate to be determined by the Central Bank. The cut-off yield determined at the auction will be coupon rate percent per annum on the stock sold at the auction. Interest on the loan will be paid on January 17 and July 17.
The investment on government stock will be reckoned as an eligible investment in government securities by banks for the purpose of statutory liquidity ratio (SLR) under Banking Regulation Act, 1949 and the stocks will qualify for ready forward facility.