Panel proposes raising RBI's ways and means advances corpus by 11.2% to Rs 67,839 crore
The panel has also recommended an annual review of the WMA corpus capping annual upward revision at 4%. The extent of upward revision could be based on the last three years of accounts while there would be no reduction in the existing limit.
A panel reviewing the Reserve Bank of India's liquidity support to state governments through ways and means advances (WMA) has proposed raising the WMA corpus by 11.2% to Rs 67,839 crore. The panel, headed by former Karnataka additional chief secretary ISN Prasad, favors state-wise limits based on each state's revenue receipts. The committee recommends an annual review of the WMA corpus, with an annual upward revision capped at 4%.
The current aggregate borrowing limit for all state governments and union territories under the WMA scheme is Rs 61,008 crore, effective January 9, 2026.
The committee suggests reducing continuous overdraft days from 14 to 10 and quarterly overdraft limit days from 36 to 30 to discourage the taking of overdrafts. They also propose increasing the Special Drawing Rights (SDR) limit against eligible investments held in the Consolidated Sinking Fund (CSF) from the current 50% to 75%.
The WMA window provides liquidity support to state governments and union territories to manage any mismatch in their receipts and payments. State governments utilize the SDR window first, followed by the WMA, and only then triggers the overdraft facility if the WMA limit is exhausted.
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- Panel proposes raising RBI's ways and means advances corpus by 11.2% to Rs 67,839 crore economictimes.indiatimes.com
