The Andhra Pradesh government has raised an additional ₹4,000 crore through open market borrowings (OMB) at the close of the calendar year, to meet expenditure and cash flow requirements. The borrowing was conducted through the Reserve Bank of India (RBI) through the auction of the State securities.
With this latest tranche, the total open market borrowings mobilised by the State during the current calendar year have crossed ₹86,000 crore. The year-end borrowing was necessitated by routine fiscal commitments, including welfare disbursements, infrastructure spending, and settlement of pending bills. Officials say that the borrowing exercise was undertaken strictly in accordance with RBI norms and within the limits approved for the State.
Data on the State’s borrowing pattern reveal a steady and sustained reliance on monthly securities auctions. The government has been raising funds through RBI-conducted auctions almost every month, with borrowings not falling below ₹1,000 crore in any given month. In May, the State raised ₹7,000 crore, the highest monthly borrowing during the year. This was followed by significant borrowings in June, including a ₹6,000 crore tranche and another ₹5,550 crore raised in the same month. Borrowings remained elevated in the latter half of the year as well, touching ₹5,000 crore each in August and September.
Officials noted that recourse to market borrowings typically intensifies towards the end of the financial and calendar year, when expenditure peaks. They said the funds raised would help ensure uninterrupted implementation of government programmes and timely payments to contractors, beneficiaries and departments.
Officials attributed the higher borrowings during these months to increased expenditure commitments arising from welfare schemes, development works and the clearance of accumulated liabilities. Monthly securities auctions, they said, have become a routine feature of State finances amid rising obligations.
The government has emphasised that it is following a calibrated approach to debt management, balancing developmental priorities with fiscal prudence. Officials also pointed out that the borrowings are being structured across different tenures to manage repayment pressures.
According to official sources, the maturity period of these market borrowings ranges from six to 16 years, with some securities carrying repayment obligations extending up to 2046.
While longer-tenure instruments help spread repayments over time and ease immediate fiscal stress, they also commit future governments to servicing debt for decades. With a significant portion of the ₹86,000 crore raised this year falling into the medium- and long-term category, Andhra Pradesh’s long-term debt profile has come under close scrutiny.
The scale and frequency of borrowings have drawn attention from fiscal analysts and financial institutions monitoring the State’s debt sustainability. Officials, however, maintain that all borrowings are within approved limits and remain essential to maintaining administrative continuity and funding key development and welfare initiatives.
Published – December 30, 2025 08:50 pm IST
