State Debt

Investors urge RBI to let state govt debt be sold as zero-coupon bonds

Allowing state notes to be turned into so-called strip bonds would give investors an extra spread of 30-to-40 basis points over comparable federal securities, one of the people said

Rs 27k cr from Rs 47k cr raised paid as interest on previous loans: Punjab

With the opposition targeting the AAP government in Punjab over the state's debt, its finance minister Harpal Singh Cheema on Monday said that Rs 27,000 crore from around Rs 47,000 raised in the last 18 months has been paid as interest on the borrowings under previous governments. He accused the Congress, BJP and the Shiromani Akali Dal of spreading false propaganda against the AAP government after the opposition parties accused the Bhagwant Mann dispensation of pushing the state to the brink of financial calamity with an addition of Rs 50,000 crore more debt since it came to power last year. The opposition parties had latched onto the issue to target the Mann government after Punjab Governor Banwarilal Purohit in his letter to the CM said that he had learnt that the debt of Punjab rose by about Rs 50,000 crore during your regime. On Monday, state Finance Minister and senior Aam Aadmi Party leader Cheema also appealed to the Punjab governor to help the state government in getting ..

States' borrowing cost rises to 7.49%, coupon rate highest in 16 weeks

States' borrowing cost rose as they offered a coupon rate of 7.49 per cent for the securities sold in auction on Monday. The coupon rate is the highest in the past 16 weeks, according to an analysis by Icra Ratings. Nine states together raised Rs 13,200 crore from selling government securities in the auction held on Monday. While the amount mopped up was 4 per cent lower than the indicated amount for the week in the auction calendar, the funds were raised at a higher cost, as per the analysis. The weighted average cut-off coupon rate rose to 7.49 per cent, up 4 basis points from 7.45 per cent in the auction last week. The rate rose in spite of the fact that the weighted average tenor dipped to 13 years from 15 years, the analysis showed.

States' debt cost continues to rise to nearly 7.5% to Rs 16,200 cr

States continue to pay higher interest rates to investors for their debt, with the latest weighted average cost rising to 7.46 per cent at Tuesday's auctions wherein nine states raised Rs 16,200 crore. The weighted average cut-off/yield on state government securities (SGS) rose by 5 bps to 7.46 per cent in the auction held on Tuesday, from 7.41 per cent in the last weekly auction, despite a stable weighted average tenor of 16 years and the money raised was in line with the amount indicated for this week in the auction calendar, according to a note by Aditi Nayar, the chief economist at Icra Ratings. Accordingly, the spread between the 10-year SGS and 10-year government of India security yield eased mildly to 32 bps from 34 bps last week.

As state borrowings balloon, Assam witholds dues worth Rs 22,000 crore

While Assam Chief Minister Himanta Biswa Sarma claims that Assam will surpass the GDP of Punjab within the next three years, the opposition is constantly alleging that the state is in major debt

Odisha govt confident public debt to stay within limit of 25% of GSDP

The debt level of Odisha is now within the stipulated limit and it is expected to increase by 4% by the end of financial year 2026-27

Ahead of budget, 13 states raise Rs 25,800 cr in debt capital from markets

In the second-highest auction so far in FY23, 13 states raised Rs 25,800 crore in debt capital from markets on Tuesday, paying a higher price as the cost rose by 4 basis points to 7.68 per cent. The latest auction is 9 per cent higher on-year basis but was 19 per cent lower than indicated for this week in the auction calendar, according to a note by Icra Ratings. The weighted average cut-off or the interest rate payable annually by the states, rose by a further 4 basis points to 7.68 per cent over the past auction, Icra Ratings chief economist and head of research & outreach Aditi Nayar said in the note. She said while the weighted average tenor rose to 15 years from 13, the yield curve was inverted at the longer-end. Accordingly, the spread between the 10-year state bonds also called state development loans and the benchmark G-sec (Government Securities) yield rose to 33 basis points from 30 basis points last week.

States debt cost falls 12 bps to 7.67% on receding appetite from issuers

States on Tuesday got some reprieve in their debt cost with the weighted average price falling by 12 bps to 7.67 per cent due to receding appetite from issuers as they received tax payouts from the Centre last week. Assam, Bihar, Karnataka and Punjab have raised Rs 8,800 crore from the market at the auctions, which is nearly 31 per cent lower than the Rs 12,800 crore indicated for this week. According to Icra Ratings, the states have been drawing less from the market as the Centre has released two instalments of tax devolution aggregating to Rs 1.2 lakh crore on November 10, which eased their cash-flow position, leading to some states skipping the auction. The additional devolution in November may continue to drive the trend of lower-than-indicated borrowings in the coming weeks, the agency said. As a result, at the auctions today, the weighted average cut-off declined by 12 bps to 7.67 per cent from 7.79 in the last auction, amid a stable weighted average tenor at 12 years, the ..

States' borrowing cost up at record 7.69% despite 40% dip in bond issuances

So far this fiscal, the issuance of State Development Loan (SDL) as state debt is known, has declined 40 per cent as 10 states did not participate in the auctions conducted so far.

At 7.43%, states debt cost shoots over the roof at the last auction of FY22

According to Icra Ratings, the indicative borrowing calendar indicated 28 states and two Union territories to raise Rs 8.96 lakh crore.

States' avg per capita debt jumps 16.4% for 3-yr period ending FY21: Report

The maximum addition in states'' borrowings has taken place this fiscal due to the pandemic that has eaten away their revenue by 21.2 per cent, it said

States' rising debt amid pandemic a risk to their finances, says RBI

The maturity profile of states' debt suggest that redemption pressure is likely to double from 2026 onwards

Ghost of loans returns to haunt some of the debt-ridden Indian states

The RBI pointed out that redemption pressure on state loans will start rising from 2018-19 and reach a peak in 2026-27.

Ghosts of past loans haunt India, borrowings for repayments likely to soar

Redemption pressure on states, which normally issue plain vanilla bonds with 10-year maturity, increased from the year ended March 2018, according to the RBI's Study of State Finances

Ballooning state debt

Populism and profligacy undercut India's fiscal stability