RBI Revises Ways and Means Advances Limit for States and UTs

The Reserve Bank of India has revised the Ways and Means Advances limit for state governments and Union Territories to Rs 60,118 crore, effective from July 1, 2024. This revision is based on the recommendations of a group consisting of state finance secretaries and is aimed at addressing expenditure data for recent years.

The Reserve Bank of India (RBI) announced on Friday an upward revision of the aggregate Ways and Means Advances (WMA) limit for state governments and Union Territories. Effective from July 1, 2024, the new limit will be Rs 60,118 crore, up from the previous Rs 47,010 crore.

The WMA are temporary financial accommodations provided by the RBI to central, state governments, and Union Territories to manage mismatches between receipts and payments.

This revision follows recommendations from a group of state finance secretaries and takes into account recent years' expenditure data. The RBI noted that the Special Drawing Facility (SDF) linked to state investments in marketable securities like auction treasury bills will remain unchanged.