The Reserve Bank of India (RB

In order to meet their budgetary requirements, State Governments borrow from the market by issuing dated securities called State Development Loans(SDLs). SDLs have all characteristics similar to that of CGs. The RBI has entered into agreements with 29 State Governments and one Union Territory (UT of Puducherry) to manage their public debt. The State Governments have to get authorisation from the Centre for any borrowing in case there is any outstanding loan that they have from the Centre. Servicing of interest at half-yearly intervals and the repayment of principal on the maturity date is carried out by the RBI on behalf of the states. RBI, in consultation with State Governments, announces the indicative quantum of borrowing on a quarterly basis. Market borrowings are raised by the RBI on behalf of the State Governments as approved by the Ministry of Finance in consultation with the Planning Commission (On 1 January 2015, a Cabinet resolution was passed to replace the Planning Commission with the newly formed NITI Aayog (National Institution for Transforming India).