Mumbai: As the COVID-19 pandemic continues to affect state finances, the Reserve Bank of India (RBI) on Friday extended the existing interim limit of Rs. 51,560 crore for Ways and Means Advances (WMA) to states till September 30, 2021.
“The WMA limit arrived at by the Committee based on total expenditure of States/ UTs, works out to Rs.47,010 crore. As the effect of the COVID-19 pandemic is still prevalent, the existing interim WMA limit of Rs.51,560 crore for all States/ UTs shall continue for six months i.e., up to September 30, 2021. The Reserve Bank will review the WMA limit thereafter, depending on the course of the pandemic and its impact on the economy” RBI said in a statement.
The Ways and Means Advances (WMA) are short-term loan facilities which allow the Centre and state governments to borrow funds from the RBI to bridge their temporary mismatch between expenditure and receipts. The interest rate on WMA is the repo rate announced by the RBI.