Home India Ministry of Finance Parliament Question: Net Borrowing Ceiling...
Date: 2025-08-04 Category: Not Applicable State: Union Government Country: India

Parliament Question: Net Borrowing Ceiling

Issued by Ministry of Finance · Not Applicable

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Executive Summary & Key Takeaways

Executive Summary: This document presents the Indian government's response to Lok Sabha Unstarred Question No. 2380 regarding Net Borrowing Ceilings (NBC) and Off-Budget Borrowings of states. It details the criteria for fixing NBC, the treatment of Off-Budget Borrowings, and provides state-wise data for the last five years (FY 2020-21 to FY 2024-25) as per data available until August 4, 2025. The information includes NBC fixed by the Union Government, actual open market borrowings reported by the Reserve Bank of India (RBI), and Off-Budget Borrowings declared by State Governments. Key Points / Main Content: * **Net Borrowing Ceiling (NBC):** * Annual NBC of states is fixed as a percentage of Gross State Domestic Product (GSDP) based on Finance Commission recommendations. * The government enhanced the borrowing limit of states by 2% of GSDP for the year 2020-21 to address challenges posed by the COVID-19 pandemic. * State-wise details of NBC fixed by the Union Government for the last five years are in Annexure I. * **Open Market Borrowings:** * State-wise actual open market borrowings for the last five years, as reported by the Reserve Bank of India (RBI), are provided in Annexure II. * **Off-Budget Borrowings:** * Off-budget borrowings by State Public Sector companies/corporations, Special Purpose Vehicles (SPVs), and other equivalent instruments, where the principal and/or interest are serviced from the State Budgets, were noted by the Ministry of Finance. * Effective March 2022, such borrowings are considered as borrowings made by the State itself for the purpose of issuing consent under Article 293(3) of the Constitution of India. * This includes instances where servicing is done through assignment of taxes/cess or any other State revenue. * Details of Off-Budget Borrowings from FY 2021-22 to FY 2024-25, as declared by State Governments, are in Annexure III. Impact Analysis: * **State Governments:** * Impact: Subject to Net Borrowing Ceilings (NBC) determined as a percentage of GSDP. Off-budget borrowings impact their overall borrowing limits and require declaration. * Action Required: Adhere to NBC limits, declare all off-budget borrowings accurately, and factor in the impact of off-budget borrowings on their borrowing capacity. * **Ministry of Finance:** * Impact: Responsible for setting NBC, monitoring state borrowings (including off-budget borrowings), and ensuring compliance with Article 293(3) of the Constitution of India. * Action Required: Continue to monitor state borrowings, enforce the policy on off-budget borrowings, and ensure accurate data collection and reporting. * **Reserve Bank of India (RBI):** * Impact: Provides data on actual open market borrowings by states. * Action Required: Continue providing accurate and timely data on state borrowings to the Ministry of Finance. * **State Public Sector companies/corporations and Special Purpose Vehicles (SPVs):** * Impact: Borrowings where principal and interest are serviced out of state budgets are now counted towards the state's borrowing limit. * Action Required: Ensure the relevant State Government accounts for these borrowings in their overall debt management strategy.

Key Entities Referenced

Ministry of Finance: The Indian government ministry responsible for the country's finances. Lok Sabha: The lower house of the Parliament of India. Shri Ramasahayam Raghuram Reddy: Member of Lok Sabha who raised the unstarred question No. 2380. Shri Pankaj Chaudhary: Minister of State in the Ministry of Finance, who provided the answer to the question. Finance Commission: A constitutional body in India that recommends measures for regulating the financial relations between the Union and the States. Gross State Domestic Product (GSDP): A measure of the total value of goods and services produced within a state's boundaries in a specific time period. Reserve Bank of India (RBI): India's central bank, responsible for regulating the country's monetary policy and banking system. Constitution of India: The supreme law of India.
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GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF EXPENDITURE LOK SABHA UNSTARRED QUESTION NO. 2380 TO BE ANSWERED ON MONDAY, 4th AUGUST, 2025 SRAVANA 13, 1947 (SAKA) NET BORROWING CEILING 2380. Shri Ramasahayam Raghuram Reddy Will the Minister of Finance be pleased to state: (a) the details of Net Borrowing Ceilings fixed by the Government and actual borrowings of States during the last five year, State-wise; (b) the details of Off-Budget Borrowings of States during the last five years, State-wise; (c) whether the Government has placed any mechanism to adjust Off-Budget Borrowings while determining the Net Borrowing ceiling; and (d) if so, the details thereof? ANSWER MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY) (a) Based on recommendations of the Finance Commission, the annual Net Borrowing Ceiling (NBC) of all States is fixed as a percent of the Gross State Domestic Product (GSDP). Moreover, in view of the resource requirement to meet the challenges posed by the COVID-19 pandemic, the Government of India had enhanced the borrowing limit of the States by 2 percent of their Gross States Domestic Product (GSDP) for the year 2020-21. The State-wise details of Net Borrowing Ceilings fixed by the Union Government during the last five years is enclosed at Annexure-I. As per the information provided by Reserve Bank of India (RBI), the State-wise actual open market borrowings during the last five years is enclosed at Annexure-II.(b) to (d) Instances of Off-budget borrowings by certain State Public Sector companies, Special Purpose Vehicles (SPVs) and other equivalent instruments, where principal and/or interest are to be serviced out of the State Budgets had come to the notice of the Ministry of Finance. Considering the effect of bypassing the NBC by such borrowings by some States, as it was decided and communicated to the States in March 2022 that borrowings by State Public Sector companies/corporations, Special purpose vehicles (SPVs) and other equivalent instruments, where principal and/or interest are to be serviced out of the State Budgets and/or by assignment of taxes/cess or any other State’s revenue, shall be considered as Borrowings made by the State itself for the purpose of issuing the consent under Article 293(3) of the Constitution of India. The details of Off-Budget Borrowings from FY 2021-22 to FY 2024-25 by State Public Sector companies/corporations, Special Purpose Vehicles (SPVs) and other equivalent instruments, where principal and/or interest are to be serviced out of the State Budgets and/or assignment of taxes/cess or any other State’s revenue as declared by the State Governments is enclosed at Annexure-III. *****Annexure-I referred to in the answer of part (a) of Lok Sabha Unstarred question no. 2380 for 04.08.2025 State-wise details of Net Borrowing Ceilings (NBC) of States fixed by the Union Government during the last five years (Rs. in crore) NBC @ 3% NBC @ 4% NBC @ 3.5% NBC @ 3% NBC @ 3% Sl. of estimated of estimated of estimated of estimated of estimated Name of State No. GSDP GSDP GSDP GSDP GSDP 2020-21 2021-22 2022-23 2023-24 2024-25 1 Andhra Pradesh 30,305 42,472 44,574 43,760 49,217 2 Arunachal Pradesh 855 1,175 1,325 1,441 1,435 3 Assam 11,216 15,084 17,310 16,212 18,882 4 Bihar 19,384 27,179 27,615 25,807 26,893 5 Chhattisgarh 10,749 14,324 15,013 15,241 17,048 6 Goa 2,677 3,280 3,148 2,933 3,270 7 Gujarat 52,224 71,938 71,163 76,189 83,409 8 Haryana 25,759 33,682 31,572 32,713 35,985 9 Himachal Pradesh 5,259 6,701 6,311 6,342 6,551 10 Jharkhand 10,589 14,179 13,124 12,039 13,972 11 Karnataka 54,108 68,853 76,343 77,020 85,858 12 Kerala 27,130 36,087 32,439 32,442 37,512 13 Madhya Pradesh 28,473 41,442 44,136 45,412 45,667 14 Maharashtra 92,364 1,15,184 1,10,626 1,15,914 1,17,238 15 Manipur 904 1,441 1,524 1,262 1,498 16 Meghalaya 1,162 1,534 1,351 1,364 1,476 17 Mizoram 789 1,225 1,423 863 1,037 18 Nagaland 941 1,429 1,246 1,363 1,211 19 Odisha 17,147 21,803 23,175 26,017 28,485 20 Punjab 18,196 22,951 22,044 20,628 23,716 21 Rajasthan 32,774 41,487 42,856 47,974 50,634 22 Sikkim 934 1,525 1,415 1,420 1,577 23 Tamil Nadu 57,759 80,627 83,955 78,298 87,176 24 Telangana 30,102 43,138 42,728 43,000 48,879 25 Tripura 1,781 2,447 2,664 2,506 2,666 26 Uttar Pradesh 58,216 69,979 71,688 70,844 82,542 27 Uttarakhand 8,427 10,467 8,620 9,871 10,789 28 West Bengal 40,724 55,289 58,461 51,113 55,094Annexure-II referred to in the answer of part (a) of Lok Sabha Unstarred question no. 2380 for 04.08.2025 Details of actual open market borrowings of all the States during the last five year (Rs. in crore) Sl. No. Name of State 2020-21 2021-22 2022-23 2023-24 2024-25 1 Andhra Pradesh 50,896 46,443 57,478 68,400 78,205 2 Arunachal Pradesh 767 563 559 902 1,010 3 Assam 15,030 12,753 17,100 18,500 19,000 4 Bihar 27,285 28,489 36,800 47,612 47,546 5 Chhattisgarh 13,000 4,000 2,000 32,000 24,500 6 Goa 3,354 2,000 1,350 2,550 1,050 7 Gujarat 44,780 31,054 43,000 30,500 38,200 8 Haryana 30,000 30,500 45,158 47,500 49,500 9 Himachal Pradesh 6,000 4,000 14,000 8,072 7,359 10 Jharkhand 9,400 5,000 4,000 1,000 3,500 11 Karnataka 69,000 59,000 36,000 81,000 92,025 12 Kerala 28,566 27,000 30,839 42,438 53,666 13 Madhya Pradesh 45,573 22,000 40,158 38,500 63,400 14 Maharashtra 69,000 68,750 72,000 1,10,000 1,23,000 15 Manipur 1,302 1,476 1,422 1,426 1,500 16 Meghalaya 1,777 1,608 1,753 1,364 1,882 17 Mizoram 944 747 1,315 901 1,169 18 Nagaland 1,721 1,727 1,854 2,551 1,550 19 Odisha 3,000 - - – 20,780 20 Punjab 32,995 25,814 45,500 42,386 40,828 21 Rajasthan 57,359 51,149 46,057 73,624 75,185 22 Sikkim 1,292 1,511 1,414 1,916 1,951 23 Tamil Nadu 87,977 87,000 87,000 1,13,001 1,23,625 24 Telangana 43,784 45,716 40,150 49,618 56,209 25 Tripura 1,916 300 - – - 26 Uttar Pradesh 75,500 62,500 55,612 97,650 45,000 27 Uttarakhand 6,200 3,200 3,200 6,300 10,400 28 West Bengal 59,680 67,390 63,000 69,910 76,500Annexure-III referred to in the answer of part (b) to (d) of Lok Sabha Unstarred question no. 2380 for 04.08.2025 Year wise details of Off Budget Borrowings declared by State Governments (Rs. in crore) Sl. No. State 2021-22 2022-23 2023-24 2024-25 1 Andhra Pradesh 6,288 1,976 613 - 2 Arunachal Pradesh - - - - 3 Assam 239 853 1,102 542 4 Bihar 520 687 53 - 5 Chhattisgarh 618 2,283 780 584 6 Goa 77 - - - 7 Gujarat - - - - 8 Haryana 21 22 - - 9 Himachal Pradesh - - - - 10 Jharkhand - - - - 11 Karnataka 2,350 4,029 - 5,438 12 Kerala 14,312 6,709 4,688 983 13 Madhya Pradesh 533 564 374 568 14 Maharashtra - 2,500 7,700 13,990 15 Manipur - 293 228 109 16 Meghalaya - 64 6 12 17 Mizoram - - - - 18 Nagaland - - 39 - 19 Odisha - - - - 20 Punjab 770 484 1,675 4 21 Rajasthan - - - - 22 Sikkim 454 121 - - 23 Tamil Nadu 595 1,121 1,560 28 24 Telangana 35,258 9,597 2,546 2,697 25 Tripura - - - - 26 Uttar Pradesh 3,951 3,488 - - 27 Uttarakhand - - - - 28 West Bengal 1,089 1,089 - -

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