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New Delhi: RBI Governor Sanjay Malhotra on Tuesday urged state governments to strengthen their long-term fiscal health through prudent borrowing, better cash management and greater attention to the quality of expenditure.
Addressing the 36th Conference of State Finance Secretaries, Malhotra highlighted the importance of how states spend and manage their resources alongside their borrowing decisions, according to an RBI release.
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Finance secretaries from 27 states and three Union Territories attended the conference, along with senior officials from the Union Ministry of Finance, the Controller General of Accounts and the Comptroller and Auditor General of India.
The conference reviewed states’ market borrowings, short-term financial accommodation provided by the RBI and the adoption of a benchmark issuance strategy for state government securities.
Malhotra emphasised the need for prudent borrowing strategies and efficient cash management practices, while maintaining expenditure quality to safeguard fiscal health over the longer term.
He also advised states to make effective use of the State Level Bankers’ Committee (SLBC) forum.
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The Governor urged states to join the Unified Lending Interface (ULI) and use Programmable Central Bank Digital Currency (P-CBDC) for direct benefit transfers.
During the conference, he released a booklet titled ‘Compendium on Cash and Debt Management for State Governments’. It brings together key concepts, operational processes and good practices in cash and debt management in a concise, accessible format, the RBI said.
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