The RBI on Friday mentioned the prevailing interim Methods and Means Advances (WMA) restrict of Rs 51,560 crore for all states and Union Territories will proceed as much as September 30, 2021, because the impact of the COVID-19 pandemic continues to be prevalent. WMAs are short-term advances given by the RBI to the federal government to tide over any mismatch in receipts and funds.
The RBI mentioned it has revised the WMA Scheme of States and Union Territories (UTs) based mostly on the suggestions of the Advisory Committee on WMA to state governments. The WMA restrict arrived at by the Committee based mostly on complete expenditure of States/ UTs, works out to Rs 47,010 crore. “Because the impact of the COVID-19 pandemic continues to be prevalent, the prevailing interim WMA restrict of Rs 51,560 crore for all States/ UTs shall proceed for six months i.e., as much as September 30, 2021,” it mentioned in an announcement. The Reserve Financial institution will assessment the WMA restrict thereafter, relying on the course of the pandemic and its affect on the economic system, the central financial institution mentioned.
It additional mentioned Particular Drawing Facility (SDF) availed by state governments and UTs will proceed to be linked to the quantum of their investments in marketable securities issued by the Authorities of India, together with the Public sale Treasury Payments (ATBs). The online annual incremental investments in Consolidated Sinking Fund (CSF) and Assure Redemption Fund (GRF) will proceed to be eligible for availing of SDF, with none higher restrict. CSF and GRF are reserve funds maintained by some State Governments with the Reserve Financial institution of India. “A uniform hair reduce of 5 % shall be utilized in the marketplace worth of securities, for figuring out the working restrict of SDF each day,” the RBI mentioned.
The rate of interest on SDF, WMA, and Overdraft will proceed to be linked to the coverage fee (repo) of the Reserve Financial institution.