**Executive Summary**
This document comprises two notifications from the Government of Tamil Nadu, both issued on November 8, 2016, and published in the Tamil Nadu Government Gazette on November 16, 2016. The notifications concern amendments to the Scheme for Constitution and Administration of the Consolidated Sinking Fund of the Government of Tamil Nadu. The purpose of these amendments is to reflect changes in financial practices and investment strategies.
**Key Points / Main Content**
* **Notification No. 320 (L)/W&M.I/2016:**
* Amends Finance Department Notification No. 161(L)/(W&M-I)/2006, dated September 28, 2006.
* Changes the nomenclature of "Special Ways and Means Advances (Special WMA)" to "Special Drawing Facility" with effect from June 23, 2014, to align with Reserve Bank of India practices.
* Substitutes the words "SPECIAL DRAWING FACILITY" for "SPECIAL WMA" in the relevant explanation (d) of clause 4 of the scheme.
* Reaffirms that all other provisions of the scheme remain in full force and effect.
* **Notification No. 321 (L)/W&M.I/2016:**
* Amends Finance Department Notification No. 161(L)/(W&M-I)/2006, dated September 28, 2006, as previously amended.
* Deletes the phrase "such that the availment of Special Drawing Facility under this provision does not exceed the Normal WMA limit fixed by the bank" from the proviso to clause 4 (d).
* Substitutes the existing main clause 8 with a revised investment strategy.
* Accretions to the Fund will be invested in Government of India Dated Securities, Treasury Bills, Special Securities of the Government of India, and State Development Loans of other States, with maturities determined by the Bank in consultation with the Government.
* The Bank will facilitate security investments by acquiring securities from the secondary market without additional charges beyond those specified in paragraph 10.
* The existing sub-clause 8(b) shall be substituted with, "The Bank will make available the securities for investment by acquiring the securities from the secondary market, without loading any charge other than that indicated in paragraph 10.”
**Impact Analysis**
**Stakeholder: Government of Tamil Nadu**
* **Impact:** Needs to implement the changes in nomenclature and investment strategy for the Consolidated Sinking Fund, including updating relevant documentation.
* **Action Required:** Ensure compliance with the revised investment guidelines and communicate the changes to relevant financial departments and personnel.
**Stakeholder: Finance Department**
* **Impact:** Responsible for executing the amendments related to the Consolidated Sinking Fund.
* **Action Required:** Update internal financial processes and ensure investments are made according to the new guidelines.
**Stakeholder: Reserve Bank of India (RBI)**
* **Impact:** Is now the standard nomenclature for short-term credit facilities.
* **Action Required:** Consult with the Tamil Nadu Government to determine maturities for State Development Loans.
**Stakeholder: Banks Handling Tamil Nadu Investments**
* **Impact:** Responsible for managing investments of the fund.
* **Action Required:** Align investment strategies with the new guidelines, specifically focusing on Government of India Dated Securities, Treasury Bills, Special Securities, and State Development Loans acquired from the secondary market.
Key Entities Referenced
Consolidated Sinking Fund of Government of Tamil Nadu: A fund established and administered by the Government of Tamil Nadu for debt redemption.
Notification No. 161(L)/(W&M-I)/2006: Original Finance Department Notification establishing the Scheme for Constitution and Administration of the Consolidated Sinking Fund of Government of Tamil Nadu.
Special Drawing Facility: A credit facility extended by the Reserve Bank of India, replacing Special Ways and Means Advances, used by state governments for financial management.
Reserve Bank of India: The central bank of India, playing a role in the management and investment strategies of the Consolidated Sinking Fund of Government of Tamil Nadu
Finance Department (Tamil Nadu): The primary governmental body responsible for issuing the notifications and managing the Consolidated Sinking Fund.