Reserve Bank of India, RBI

Ways and Means Advances

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	The Reserve Bank of India (RBI) gives temporary loan facilities to the central and state governments. This loan facility is called Ways and Means Advances (WMA).</div>
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	<strong>When was Ways and Means Advances introduced?</strong></div>
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	The Ways and Means Advances scheme was introduced in 1997.</div>
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	<strong>Purpose of the WMA scheme</strong></div>
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	The Ways and Means Advances scheme was introduced to meet mismatches in the receipts and payments of the government.</div>
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	<strong>How does it work?</strong></div>
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	The government can avail of immediate cash from the RBI, if required. But it has to return the amount within 90 days. Interest is charged at the existing repo rate.</div>
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	If the WMA exceeds 90 days, it would be treated as an overdraft (interest rate on overdrafts is 2 percentage points more than the repo rate).</div>
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	<strong>What is WMA limit?</strong></div>
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	The limits for Ways and Means Advances are decided by the government and RBI mutually and revised periodically. For the second half of the 2019-20 financial year, RBI set Rs 35,000 crore as limit for Ways and Means Advances.</div>
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	<strong>Types of WMA</strong></div>
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	There are two types of Ways and Means Advances &mdash; normal and special.</div>
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	Special WMA or Special Drawing Facility is provided against the collateral of the government securities held by the state. After the state has exhausted the limit of SDF, it gets normal WMA. The interest rate for SDF is one percentage point less than the repo rate.</div>
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	The number of loans under normal WMA is based on a three-year average of actual revenue and capital expenditure of the state.</div>
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What are Ways and Means Advances, WMA Definition, WMA News

What are Ways and Means Advances

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	Expenditure profile is a full compilation of information from all ministries and departments to analyse the Union government&rsquo;s financial performance. It documents budgetary trends on important policy issues, such as gender budget, welfare of women, resource allocation for the northeastern states and many other important issues. It also contains consolidated information about government schemes, such as centrally-sponsored schemes, subsidies, and investment in public-sector undertakings (PSUs).</div>
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	Since the merger of the Railway Budget with the Union Budget in 2017-18, the information in the expenditure profile also includes a detailed analysis of the Ministry of Railways. The statements contained in this document are prepared on the basis of inputs given by ministries and departments. Some of the statements are based on the data contained in the Expenditure Budget.</div>
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	The Expenditure profile provides a summary of expenditure of the Union government which includes actual revenues and capital spent in the previous financial year and the budgeted and revised estimates for the current financial year, besides estimates for the upcoming financial year.</div>
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	The document also provides a statement of major variations in expenditure between Budgeted Estimates and Revised Estimates of the ongoing financial year. It details the expenditure of ministries and departments, transfers to Union Territories and legislature. Expenditure profile also lists in detail the spending on subsidies &mdash; food, fertiliser and other important ones.</div>
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	The five parts of the expenditure profile also include information about spending on external sectors, such as externally aided projects and loans to foreign governments. The final part is the detailed statement of analysis on railways with an overview of receipts and expenditure.</div>
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RELATED BUDGET TERMS

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What is Expenditure profile, Expenditure profile Definition, Expenditure profile News

Expenditure profile

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	Central welfare schemes, implemented by the government to provide financial and other aids to individuals who cannot support themselves, can be categorised into two sections &mdash; centrally sponsored schemes and central sector schemes.</div>
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	Centrally Sponsored Schemes (CSS) are those schemes which are implemented by the state government but sponsored by the central government with a defined shareholding. At present, there are 30 centrally-sponsored schemes but these are umbrella programmes and they have many sub-schemes under them. The funding is borne by the states in the ratio of 50:50 or 90:10 or 75:25 or 70:30.</div>
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	These schemes are aimed at supplementing efforts undertaken by the state government because the central government has more resources at its disposal. These schemes can either be national or regional in character. In CSS, the funding by the central government works as an initiation, with further spending coming from states towards the cause.</div>
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	<strong>What is the difference between central sector schemes and centrally sponsored schemes?</strong></div>
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	Central sector schemes are implemented by the central government and the budget or financing needed for the scheme is entirely sourced by the central government. By comparison, the implementation of a centrally sponsored scheme is done by state governments. For example, the Mahatma Gandhi National Rural Employment Generation Scheme is a centrally sponsored scheme, while the National Rural Health Mission is a central sector scheme.</div>
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	Centrally sponsored schemes can be further divided into two sections &mdash; core of core schemes and core schemes. Green Revolution, White Revolution, Blue Revolution, Pradhan Mantri Gram Sadak Yojana, Pradhan Mantri Krishi Sinchai Yojana, Pradhan Manti Awas Yojana, Swachh Bharat Mission, Mid-day meals in schools and National Livelihood Mission are some core schemes. Core of the core schemes, on the other hand, include the umbrella scheme for development of scheduled castes, umbrella scheme for development of minorities, and the Mahatma Gandhi National Rural Employment Generation Scheme. Core of core schemes are implemented for social inclusion and social protection, and they are fully funded by the central government.</div>

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What are Centrally sponsored schemes, Centrally sponsored schemes Definition, Centrally sponsored schemes News

Centrally sponsored schemes

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	Government revenue refers to all the income of the government from taxes and non-tax sources. These funds are used for government expenditure. Government revenues and spending are an important part of fiscal policy of the government.</div>
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	Revenue refers to all the receipts of the government from taxes, custom duties, revenue from state-owned enterprises, capital revenues and foreign aid.</div>
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	<strong>Revenue is generated from mainly two types of sources:</strong></div>
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	<strong>Tax revenue</strong>: Taxes on incomes of individuals and corporations and also on the goods and services produced.</div>
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	<strong>Non-tax revenue:</strong> Dividends from state-run companies, central bank revenue and capital receipts in the form of external loans and debts from international financial institutions.</div>
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	India&rsquo;s total revenue in the April-November quarter of FY20 increased 12.9 per cent to Rs 10.12 trillion. It was 8.97 trillion in the same period in FY19.</div>
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	Government revenues averaged Rs 3.09 trillion from 1997 until 2019, touching an all-time high of Rs 16.66 trillion in March 2019.</div>
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Ways and Means Advances

What are Ways and Means Advances

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Covid-19: RBI announces relief for exporters, gives breather to states/UTs