Centre to review states' off-budget liabilities before approving borrowing limit for FY23

The central government is planning to review each state’s off-budget liabilities before approving its borrowing limit for 2022-23, reported Financial Express. The regulation is in view of the rising yields on the state development loans (SDLs) and the rate hike cycle started by the Reserve Bank of India (RBI), which could raise the cost of general government borrowings. The move will also ensure that the states do not over borrow by understating facts. States have been directed to submit information on off-budget borrowings, guarantees being provided to state-run entities and whether contributions to the national pension system (NPS) are being deposited in time or not. In the last two years, revenue constraints, Covid-induced extra spending on welfare and elevated capital expenditure by the Centre necessitated higher budget deficits and thereby elevated borrowings. As Covid pandemic hit states’ tax revenues, the Centre raised their borrowing limit by two percentage points to five per cent of GDP in 2021. States were also allowed to borrow up to 75 per cent of the annual threshold in April-December of the year. In 2021-22, the states’ borrowing limit was slashed to 4.5 per cent of GDP and it was cut further to four per cent of GDP in 2022-23.

References
1. https://www.financialexpress.com/economy/centre-ups-scrutiny-of-borrowings-by-states/2516860/
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All listed Companies
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 Net profit 139.8 55.1 31.9 45.7
 PAT margin (%) 9.0 9.6 9.0 11.4
 Count of Cos. 4,556 4,677 4,690 905
Non-financial Companies
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 Expenses 62.6 36.0 29.0 27.9
 Net profit 192.7 59.7 18.3 25.7
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 Net fixed assets 4.9 -2.1
 Current assets 10.8 19.0
 Current liabilities 0.8 12.5
 Borrowings 12.1 7.1
 Reserves & surplus 12.4 9.5
 Count of Cos. 3,330 3,382 3,402 637
Numbers are net of P&E
Updated on: 16 May 2022 3:28PM
Annual Financials of All Companies
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All Companies
 Income 0.5 -0.9 16.1
 Expenses 0.3 -3.3 16.7
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 PAT margin (%) 2.0 4.5 12.3
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Non-financial Companies
 Income -1.3 -2.0 16.2
 Expenses -1.0 -4.1 17.4
 Net profit -20.8 63.1 20.8
 PAT margin (%) 2.2 4.2 11.1
 Net fixed assets 11.2 1.3 8.5
 Net worth 2.2 10.4 8.3
 RONW (%) 4.7 8.0 15.8
 Debt / Equity (times) 1.2 1.0 0.1
 Interest cover (times) 1.9 2.5 26.6
 Net working capital cycle (days) 81 84 38
 Count of Cos. 25,551 23,301 36
Numbers are net of P&E
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