State market borrowings down 23.7% YoY in Q1FY23 on strong cash flows

Icra said a comfortable cash flow position of the state governments was due to a back-ended release of tax devolution to the states in FY2022

Market borrowing by states and union territories (UT) using development loans declined 23.7 per cent year-on-year (YoY) basis to Rs 1,102 billion (Rs 1.1 trillion) in the first quarter ending June 2022 (Q1 of FY23).

According to rating agency Icra, states and UTs raised Rs 1.44 trillion in April-June 2021 (Q1 of FY22). The mop-up was 42 per cent lower than the indicated Rs 1.902 trillion in the borrowing calendar, reflecting a comfortable cash flow position.

Icra said a comfortable cash flow position of the state governments was due to a back-ended release of tax devolution to the states in