Amidst the intense lockdown in most of the districts nationwide due to the COVID-19 pandemic, there’s a latest Indian Business newscast, Tamil Nadu tops market borrowings and has by far collected ₹30,500 crores in fiscal 2020-21.

As per the Socio-Economic Statistical Information of Reserve Bank of India (RBI), Tamil Nadu tops market borrowings & has accounted for 17% of the borrowings (₹25,500 crores), through the issue of bonds called the state development loans. Maharashtra accounted for 14%, followed by Rajasthan and Andhra Pradesh at 17% each. The southern state of Tamil Nadu has issued more long tenure bonds when compared to other states and has not tapped short-terms funding avenues.

The State Chief Minister – Edappadi K. Palaniswami recently said that with industries and businesses remaining shut, the State would sustain a shortfall in revenue of about ₹12,000-₹13,000 crores a month!! As per the Finance Secretary’s projections, the State’s GST (Goods and Services Tax) collection fell 15% in June, higher than the 3% national fall.

On July 7, Tamil Nadu borrowed an additional amount of ₹500 crores rather than the ₹2,000 crores, which was originally planned. The State had earlier planned to raise ₹2,000 crores through the issue of bonds of ₹1,000 each along with tenures of 35 years and 3 years respectively. Tamil Nadu had a choice to raise the ₹250 crores in each of these securities, through the ‘greenshoe’ option. Tamil Nadu has also preferred the market borrowing route for raising funds to meet the increased expenditure and falling revenues.

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