Skip to main content
LIVE WED, 7 OCT, 2026 BENGALURU · 28°C EDITION № 160 · FREE · NO LOGIN
INDIA INDIA · 2 MIN READ

State borrowing to rise 26% to ₹3.6 trillion in Q3 under new RBI strategy

State government securities (SGS) issuances are set to increase by 25.9% year-on-year to ₹3.6 trillion in the October-December quarter, according to an ICRA report.

State government securities (SGS) issuances are set to increase by 25.9% year-on-year to ₹3.6 trillion in the October-December quarter, according to an ICRA report. Net state borrowing is expected to rise 26.8% to ₹2.3 trillion, up from ₹1.8 trillion in the same period last year, as states refinance older debts and meet welfare and revenue expenditures, per livemint.com.

The rise in borrowings follows the adoption of the Reserve Bank of India's Benchmark Issuance Strategy (BIS) by 26 states and Union territories, representing 77% of the total planned borrowing in the quarter. Introduced as a pilot in Q1 FY27, the BIS requires participating states to issue securities within specified maturity buckets outlined in the quarterly borrowing calendar, replacing the previous random tenor issuance approach, according to livemint.com.

This new issuance framework aims to bring greater predictability and standardization to state market borrowing, contrasting with the Centre's borrowing approach. The RBI's indicative auction calendar released on October 1 set gross state bond issuances by 27 states and two UTs at ₹3.6 trillion in Q3 FY27, compared with ₹2.9 trillion raised a year ago. Estimated redemptions of ₹1.3 trillion are factored into the net borrowing figures, per livemint.com.

India has 28 states and 8 Union territories in total. The increased borrowing plan reflects states' efforts to manage maturing debt and fund expenditures amid evolving fiscal demands. The RBI's Benchmark Issuance Strategy pilot, now adopted by the majority of states and UTs, is a key factor in the borrowing pattern for Q3 FY27, according to livemint.com.

Editorial standards. Reported and edited at Startupniti's news desk from the sources listed in the right rail. Every fact traces to a citation. If something looks wrong, write to corrections.
▸ WIRE
Premium content free for first 12 months · sign up to unlock Razorpay subscriptions launch Jan 2027 — ₹199/mo or ₹999/yr Every story reads every Indian tech source so you don't have to Every article cited · trust the source, not just the byline India's startup desk, edited daily Founders · Funding · Policy · Tech — three crawls a day Premium content free for first 12 months · sign up to unlock Razorpay subscriptions launch Jan 2027 — ₹199/mo or ₹999/yr Every story reads every Indian tech source so you don't have to Every article cited · trust the source, not just the byline India's startup desk, edited daily Founders · Funding · Policy · Tech — three crawls a day