Central Bank of India pegs state bond market borrowing

The market borrowing by state governments in July-September has been pegged at Rs 2.12 trillion rupees.

The actual amount of borrowings and details of the States UT Union Territories participating would be revealed by press releases 2 -- 3 days prior to the actual auction day and would depend on the approval of the State Governments UTs and the market conditions, according to Article 293 3 of the Constitution of India.

The central bank said that the state bond auctions will be conducted in a non-disruptive manner, taking into account market conditions and other relevant factors.

The central bank will aim for the state government borrowings to be distributed evenly throughout the quarter.

The release said that it reserves the right to change the dates and amount of auction in consultation with State Governments UTs.

The actual amount raised by bond sales was lower, likely due to sitting on high cash balances, analysts said.

State governments usually increase their borrowing in the second half of the year, as the Centre tends to borrow less during that period.

In the budget for the current financial year, the government has announced a record high gross market borrowing programme of Rs 14.95 trillion. Gross bond sales for the year are projected to be 14.3 trillion, according to the Centre's gross bond sales for the year.