Provisional RBI data reveals sharp increase in State Government loans: outstanding advances rose from ₹8,590 crore (Sep 25) to ₹38,414 crore (Oct 2) 2026, indicating aggressive state-level borrowing.
Sharp Spike in State Government Borrowing Seen
Provisional data from the RBI’s Weekly Statistical Supplement indicates a substantial increase in loans and advances to State Governments—from ₹8,590 crore on September 25, 2026, to ₹38,414 crore on October 2, 2026.
This nearly five-fold jump within a week reflects concentrated market borrowing by state governments, likely ahead of upcoming OMOs or fiscal deadlines. The spike may also be linked to the recent auction notifications by Assam and Bihar, as such drawdowns are reflected in RBI’s balance sheet only upon fund disbursement.
The data highlights the timing mismatch between auction announcements and actual liquidity absorption. Legal and fiscal analysts should monitor these patterns closely, as they affect intergovernmental financial relations and impact state debt sustainability indicators under the Fiscal Responsibility and Budget Management framework.
