RBI Governor Sanjay Malhotra Stresses Expenditure Quality at Finance Secretaries Meet

RBI Governor stresses expenditure quality, prudent borrowing at 36th Conference of State Finance Secretaries

Mumbai, October 27

The conference, inaugurated by the Governor of the Reserve Bank of India, Sanjay Malhotra, centered on the theme 'Role of Quality of Expenditure, Effective Cash and Prudent Debt Management in Enhancing States' Fiscal Sustainability'.

According to the Reserve Bank of India, the high-level meeting brought together finance secretaries representing 27 states and three Union Territories. Senior officials from the Ministry of Finance, Government of India, the Controller General of Accounts, and the Comptroller and Auditor General of India were also in attendance.

Addressing the delegates, the RBI Governor underlined the necessity of expenditure control and strategic debt planning for long-term state stability.

"The Governor emphasised the importance of maintaining the quality of expenditure to ensure the long-term fiscal health of the States," the central bank noted in a release.

The Governor further directed state leadership toward stronger discipline in day-to-day liquidity management and liabilities.

"He also emphasised on the need for the States to adopt prudent borrowing strategies and efficient cash management practices," the RBI stated.

Turning to technological platforms and institutional channels, the Governor urged administrations to integrate modern lending and transfer systems into their governance architecture.

"The Governor urged the States to onboard onto the Unified Lending Interface (ULI) and utilise Programmable Central Bank Digital Currency (P-CBDC) for Direct Benefit Transfers (DBT)," the reserve bank highlighted.

State officials were also advised to actively deploy existing banking coordination platforms to resolve regional operational matters.

"He also advised States to make effective use of the State Level Bankers' Committee (SLBC) forum," the RBI noted.

During the proceedings, the Governor released an official reference booklet titled 'Compendium on Cash and Debt Management for State Governments'. As per RBI, the compendium compiles key operational processes, concepts, and institutional practices concerning debt oversight in a concise and accessible format.

The conference concluded after detailed deliberations on state-level fiscal mechanisms, reviewing, inter alia, overall market borrowings by the states, short-term financial accommodation extended to them by the Reserve Bank, and the implementation of the Benchmark Issuance Strategy across state administrations.

— ANI