MUMBAI, Jan 10 (Reuters) - India's central bank raised
concerns over states governments' debt repayment capacity from
fiscal year 2017/18 because of higher market borrowings and the
recently announced bailout scheme for state-owned power
"The increase in market borrowings of state governments
since 2008-09 could lead to large repayment obligations from
2017-18 onwards," the Reserve Bank of India said in its annual
publication on state finances, 'State Finances: A Study of
Budgets of 2012-13', released on its website.
State governments raised a gross 1.25 trillion rupees
($22.89 billion) until Jan. 4, of the total 2.19 trillion rupees
of gross allocation for the 2012-13 fiscal year.
Under the debt restructuring of state power distribution
companies, state governments are required to take over 50
percent of their outstanding short-term liabilities as on
March-end through issuance of special securities.
States are required to issue special securities to lenders
in a phased manner over two-five years and redeem the same from
2017-18 onwards in annual instalments over the next 10 years.
"...the overall repayment pressure could be further
aggravated from 2017-18 for states that decide to participate in
the scheme for financial restructuring of state discoms," the
In September, the government had approved a plan to bailout
cash-strapped power distributors with more than $35 billion in
(Reporting by Neha Dasgupta; Editing by Subhranshu Sahu)