Govt's cash balance about 200 bln rupees, say sources

Informist, Thursday, May 4, 2023

By Krity Ambey

NEW DELHI – For the government, the new financial year started with a low cash balance and it currently has about 200 bln rupees in its account with the Reserve Bank of India, two finance ministry officials said.

"Anything above 300-400 bln rupees is the bare minimum that we would like to have," one of the officials told Informist.

The government's cash balance has been low since the beginning of the current fiscal in April because of higher expenditure and releases to states in Jan-Mar, the second official said. According to the data with the RBI, the government took ways and means advances from the central bank in the first three weeks of April.

The WMA, which was at 1.22 trln rupees as on Apr 7 fell to 31 bln rupees as on Apr 21, the RBI data showed.

A reason for the low cash balance at the beginning of the year was weak inflows into government-run small savings schemes, the first official said.

According to the latest data from the Controller General of Accounts, net inflows into small savings contracted 13.3% on year at 2.09 trln rupees in Apr-Feb.

Informist reported on Wednesday that the government mulled issuing cash management bills in April but opted for ways and means advances because of higher cost of borrowing from the market.

According to RBI data, the government had last used WMA for one week in April last year. End

Edited by Ranjana Chauhan

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