State borrowings of ₹3,18,816 crore for Q2 FY27 announced
The Reserve Bank of India has announced an indicative market borrowing calendar for State Governments and Union Territories for the July-September 2026 quarter. Total borrowings are expected to be ₹3,18,816 crore, with the Benchmark Issuance Strategy extended to more states.
Issuance strategy expands to more states
The Reserve Bank of India has extended its Benchmark Issuance Strategy (BIS) to ten additional States and one Union Territory, including Delhi, Himachal Pradesh, and West Bengal.
This expansion, effective from Q2 FY 2026-27, follows a successful pilot phase involving nine states like Andhra Pradesh and Maharashtra.
The BIS aims to enhance transparency and clarity for investors by issuing securities in specific benchmark tenor buckets according to a pre-announced calendar.
For the July-September 2026 quarter, the total market borrowings by State Governments and Union Territories are expected to reach ₹3,18,816 crore.
This indicative calendar has been prepared in consultation with the 18 States and Delhi that have adopted the BIS framework, with separate schedules for other states/UTs.
Navigating market conditions for auctions
The detailed indicative calendar for market borrowing is provided in two annexes, covering states under the Benchmark Issuance Strategy (BIS) and others.
Actual borrowing amounts and participating entities will be announced via press releases two to three days before each auction.
These final details depend on State/UT requirements, Government of India approval, and prevailing market conditions.
The Reserve Bank aims to conduct auctions in a non-disruptive manner, distributing borrowings evenly, and reserves the right to modify dates and amounts in consultation with the respective governments.
A move towards market maturity
The expansion of the Benchmark Issuance Strategy marks a significant step towards greater transparency and standardization in state government borrowings.
While this benefits investors, the inherent flexibility for last-minute adjustments introduces a degree of uncertainty for market participants.
This approach reflects the ongoing balancing act between fostering market development and accommodating the diverse financial needs of India's states.