Limited Downside Expected In Actual State Government Finances Issuance In Q3: ICRA

Capex loan disbursement could pick up in Q3 FY2024, which states may utilise to supplement their spending.

<div class="paragraphs"><p>A person counts Indian five-hundred rupee banknotes. (Photo: Radha Raswe/BQ Prime)</p></div>
A person counts Indian five-hundred rupee banknotes. (Photo: Radha Raswe/BQ Prime)

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ICRA Research Report

The Reserve Bank of India has pegged the gross issuance of State Government Securities at Rs 2.4 trillion for Q3 FY24, a YoY expansion of ~31%. Uttar Pradesh, Karnataka, Maharashtra, and West Bengal, accounting for around half of the total indicated amount for Q3 FY24.

Additionally, the combined SGS issuance of five states, which have Assembly Elections scheduled in November/December 2023, is equivalent to a fifth of the total indicated amount of Rs 2.4 trillion for Q3 FY24.

Even if the disbursal of the capex loan by the Government of India picks up in Q3 FY24, we broadly expect the issuance to be in line with the indicative amount.

Click on the attachment to read the full report:

ICRA Thematic- State Government Finances Sep 2023.pdf
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