RBI panel recommends raising states' WMA limit to ₹67,839 crore, advises even spread of borrowing

Key facts

• The Reserve Bank of India (RBI)-appointed Advisory Committee on Ways and Means Advances (WMA) to State Governments proposed raising the aggregate WMA limit for states by 11.2% to ₹67,839 crore from ₹61,008 crore.
• The aggregate WMA limit rose from ₹32,225 crore in February 2016 to ₹41,893 crore in April 2020, ₹47,010 crore in April 2022, ₹60,118 crore in July 2024 and ₹61,008 crore in January 2026.
• The committee urged states to spread market borrowings throughout the year and avoid concentration in the January-March quarter, which could raise State Development Loans (SDL) supply and borrowing costs.
• The committee proposed annual review of state-wise WMA limits based on the latest three years of accounts data, with any increase capped at 4% and no state's limit reduced below its existing level.
• The maximum period a state can remain continuously in overdraft should be cut to 10 working days from 14, and the maximum days in overdraft per calendar quarter to 30 from 36.
• The Special Drawing Facility (SDF) limit against investments in the Consolidated Sinking Fund (CSF) was proposed to be raised to 75% from 50%, and states were advised to build CSF/Guarantee Redemption Fund (GRF) corpus to at least 5% of total outstanding marketable debt or guarantees.
• Most states have adopted the Benchmark Issuance Strategy (BIS) introduced by the RBI from financial year 2026-27, and the remaining states should adopt it at the earliest.