Auctions for state government securities totaling ₹24,400 crore conducted for Andhra Pradesh, Chhattisgarh, and Rajasthan via price-based and yield-based methods.
State Governments Raise ₹24,400 Crore via Securities Auction
Several State Governments, including Andhra Pradesh, Chhattisgarh, and Rajasthan, conducted auctions for the sale of government securities, raising a total of ₹24,400 crore in face value. The auctions were held through the RBI’s e-Kuber platform, using price-based and yield-based methods depending on the state’s choice.
Andhra Pradesh re-issued ₹1,000 crore of its 7.68% SGS 2051 security; Chhattisgarh raised ₹5,000 crore via yield-based auction for a new 30-year bond; Rajasthan issued ₹10,000 crore of 7.52% SGS 2052. These borrowings support state-level capital expenditure and fiscal requirements under the Centre’s market borrowing limits.
State development loans (SDLs) are tax-free under Section 10(15)(iv)(h) of the Income Tax Act and qualify as SLR investments. Legal advisors must assess creditworthiness, compliance with Fiscal Responsibility and Budget Management (FRBM) norms, and stamp duty obligations in inter-state holdings. The auction success reflects market confidence in state fiscal discipline.
Citations
- Income Tax Act, Section 10(15)(iv)(h)
