RBI fixes Ways and Means Advances limit for states at Rs 47,010 cr
WMA are temporary advances given by the RBI to the government to tide over any mismatch in receipts and payments. / Representative image | Photo Credit: PTI
In view of improvement in the pandemic situation, the Reserve Bank on Friday decided to reduce the Ways and Means Advances (WMA) for states and Union Territories to Rs 47,010 crore from Rs 51,560 crore.
WMA are temporary advances given by the RBI to the government to tide over any mismatch in receipts and payments.
Considering the uncertainties related to COVID-19, the RBI had raised the WMA limit to Rs 51,560 crore for all states. The higher WMA was applicable till March 31, 2022.
On a review of the limits and keeping in view the gradual lifting of COVID-19 restrictions, RBI said it has been decided to revert to the WMA limits and timelines for Over Draft (OD) for state governments / UTs as recommended by the Advisory Committee on Ways and Means Advances to State Governments.
''The WMA limit for State Governments/UTs will be Rs 47,010 crore,'' it said.
These norms will be effective from April 1, 2022 and are subject to review.
The RBI further said the Special Drawing Facility (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 Auction Treasury Bills (ATBs).
Interest rate on SDF, WMA and OD shall continue to be linked to the policy rate of the Reserve Bank -- the repo rate.
Interest will be charged for all the days the advance remains outstanding, the central bank added.
The limit for WMA for the Government of India for the first half of the financial year 2022-23 has been set at Rs 1,50,000 crore.
(With inputs from PTI)
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