RBI Hikes Telangana’s Overdraft to 2,733 Crore

Hyderabad: The Reserve Bank of India’s (RBI) advisory committee on ways and means advances (WMA) has recommended raising Telangana’s WMA limit from `2,407 crore to `2,733 crore, an increase of 13.5 per cent, based on the state’s adjusted revenue receipts during 2022-23 to 2024-25.

The committee calculated Telangana’s revenue receipts at `1,59,350 crore in 2022-23, `1,69,293 crore in 2023-24 and `1,67,804 crore in 2024-25.

After adjustments for natural calamity expenditure, the average revenue-receipts base worked out to `1,65,662 crore, on the basis of which the revised WMA limit was recommended.

The report said Telangana had `7,822 crore in its Consolidated Sinking Fund (CSF) as of end-July 2026, equivalent to 1.7 per cent of its outstanding marketable debt.

Its Guarantee Redemption Fund (GRF) stood at `6,448 crore, equivalent to 2.7 per cent of its outstanding guarantees.

The committee has recommended that states progressively build their CSF and GRF corpus to at least five per cent of outstanding marketable debt and guarantees respectively.

The RBI provides short-term financial accommodation to state governments through Special Drawing Facility (SDF), WMA and Overdraft (OD) to meet temporary cash mismatches.

States are allowed to utilise their SDF limit first, followed by WMA and, after exhausting both, may avail themselves of OD.

According to the Comptroller and Auditor General of India (CAG) report for 2024-25, tabled in the Assembly in March this year, the Telangana government availed SDF of `27,730 crore from the RBI for 363 days during the year, barring two days, to meet its financial requirements.

It also utilised WMA amounting to `64,188 crore for 298 days, with the outstanding WMA at the end of the financial year standing at `5,842 crore.

The CAG report noted that the state government availed overdrafts totalling `37,457 crore for 123 days during 2024-25.

An overdraft is accessed when a state’s cash balance falls below the RBI-prescribed minimum level even after exhausting the SDF and WMA facilities.

For Telangana, the prescribed minimum cash balance was `1.38 crore.