Based on the recommendations of the Advisory Committee on Ways and Means Advances (WMA) to State Governments, 2021 (Chairman: Shri Sudhir Shrivastava), the Reserve Bank of India (RBI) has revised the WMA Scheme of States and Union Territories (UTs) as under:
The WMA limit arrived at by the Committee based on total expenditure of States/ UTs, works out to ₹47,010 crore. As the effect of the COVID-19 pandemic is still prevalent, the existing interim WMA limit of ₹51,560 crore for all States/ UTs shall continue for six months i.e., up to September 30, 2021 (State/ UT-wise WMA limits are given in the Annex). The Reserve Bank will review the WMA limit thereafter, depending on the course of the pandemic and its impact on the economy.
Special Drawing Facility (SDF)
SDF availed by State Governments/ UTs shall continue to be linked to the quantum of their investments in marketable securities issued by the Government of India, including the Auction Treasury Bills (ATBs). The net annual incremental investments in CSF and GRF shall continue to be eligible for availing of SDF, without any upper limit. A uniform hair cut of 5 per cent shall be applied on the market value of securities, for determining the operating limit of SDF on a daily basis.
Overdraft (OD) Regulations
The interim relaxations1 on OD were effective till March 31, 2021.Thereafter, extant OD Regulations of State Governments/ UTs are in force.
Interest Rate on SDF, WMA and OD
Interest rate on SDF, WMA and OD shall continue to be linked to the Policy rate of the Reserve Bank i.e., the Repo Rate. Interest will be charged for all the days the advance remains outstanding.
The prevailing rates are retained as given below:
||Rate of Interest
||If availed against net annual incremental investment in CSF and GRF
||Repo rate minus 2 per cent
|If availed against investment in G-sec/ ATBs
||Repo rate minus 1 per cent
||If outstanding up to 3 months from the date of making the advance
|If outstanding beyond three months from the date of making the advance
||Repo rate plus 1 per cent
||If availed up to 100 per cent of WMA limit
||Repo rate plus 2 per cent
|If exceeds 100 per cent of WMA limit
||Repo rate plus 5 per cent
Chief General Manager
Press Release: 2021-2022/102
Annex: WMA Limit of State Governments and UTs
|(Amount in ₹ crore)
||States/ UT s
||WMA Limit valid up to September 30, 2021
||Jammu and Kashmir
|Total (All States/ UTs)