The financial backing of the state government

Increase the number of days in which the Ways and Means can be utilized for Draft Overdraft with RBI decision
Amravati: Reserve Bank of India has increased the Ways and Means advance limit to address the financial problems caused by Corona. This will give some benefit to Andhra Pradesh. At present this limit is Rs. Due to the latest decision, it will increase to Rs 2400 crore. On April 1, the decision was increased by 30 percent and on Friday it was increased to 60 percent. The RBI said that the increase would apply to the limit of March 2020.
* On the other hand, the number of days of using the overdraft has also changed. Each state had the option of using the 14-day overdraft capability for one month. It has now been increased to 21 days. There are currently 36 working days for every three months, while the limit is increased to 50 days.
*The Ways and Means Advance Limit for Fiscal Year 2018-19 is Rs. In fiscal year 2019-20, the company adjusted Rs 60,302 crore.
* The Reserve Bank of India has announced a package of Rs. In the current Kharif and Rabi period, the project is targeting Rs 1,10,000 crore debt.
* Micro Finance Institutions Rs. It is estimated that more than 98,000 micro and small scale industries in the state will benefit from the package of Rs 50 crore.
* Financing of the National Housing Bank will increase the credit availability of the builders.
What’s the point?
The Reserve Bank acts as a bank to the state governments. These ways and means can be avoided when the difference between state collections and remittances is higher. It comes in two forms. Pre-use of special drawing facility, ways and means. After completing the two laps, they will go to overdraft. This means that the Reserve Bank has to adjust and re-charge the temporary reserves in case the state has no income.