Expenditure quality key to states’ long-term fiscal health: RBI Governor | Economy & Policy News

Reserve Bank of India (RBI) Governor Sanjay Malhotra emphasised the quality of expenditure by states for maintaining their financial health while speaking at the 36th Conference of State Finance Secretaries.

The theme of the conference was ‘Role of Quality of Expenditure, Effective Cash and Prudent Debt Management in Enhancing States’ Fiscal Sustainability’.

Addressing the participants, the Governor emphasised the importance of maintaining expenditure quality to ensure the long-term fiscal health of the states, the RBI said in a press release.

Malhotra emphasised the need for states to adopt prudent borrowing strategies and efficient cash management practices.

He urged states to onboard the Unified Lending Interface (ULI) and utilise programmable central bank digital currency (P-CBDC) for direct benefit transfers (DBT).

The meeting reviewed market borrowings by states, short-term financial accommodation to states from the Reserve Bank, adoption of the Benchmark Issuance Strategy by states, etc.

He advised states to make effective use of the State Level Bankers’ Committee (SLBC) forum.

During the conference, the Governor released a booklet titled ‘Compendium on Cash and Debt Management for State Governments’.

The booklet summarises relevant concepts, operational processes and good cash and debt management practices in a concise and accessible format.

The conference was attended by the finance secretaries of 27 states and three Union Territories, as well as senior officials from the Ministry of Finance, Government of India, the Controller General of Accounts and the Comptroller and Auditor General of India, the RBI statement said.