RBI Panel on State WMA Limits: Key Proposals
Why in the news
On 29 September 2026 the Reserve Bank of India published the report of its Advisory Committee on Ways and Means Advances (WMA) to State Governments. The panel reviewed State-wise WMA limits and other short-term financial facilities available to States. The RBI said it will examine the recommendations.
Key facts
- The panel was headed by I S N Prasad, a former Additional Chief Secretary in Karnataka.
- Proposed aggregate WMA limit is Rs 67,839 crore, against Rs 61,008 crore now, a rise of 11.2%.
- Consecutive overdraft days would be capped at 10 working days instead of 14.
- Overdraft days in a quarter would be cut from 36 to 30.
- Access to the Special Drawing Facility (SDF) against the Consolidated Sinking Fund would go up from 50% to 75% of the eligible corpus.
- States are urged to spread market borrowing evenly through the year rather than bunching it in January-March.
Proposed changes at a glance
| Parameter | Current | Proposed |
|---|---|---|
| Aggregate WMA limit | Rs 61,008 crore | Rs 67,839 crore |
| Consecutive overdraft days | 14 | 10 |
| Overdraft days per quarter | 36 | 30 |
| SDF share of eligible corpus | 50% | 75% |
About Ways and Means Advances
WMA is a temporary loan facility from the RBI that helps State governments bridge short-term mismatches between receipts and payments. When a State exhausts its WMA, it can slip into overdraft, which is allowed only for a limited number of days. The Consolidated Sinking Fund is a reserve States maintain to repay their debt.
Exam angle
- Remember the committee chair and the new WMA limit figure of Rs 67,839 crore.
- WMA is a short-term facility, while market borrowing is a longer-term source of State funding.
- Tighter overdraft caps signal fiscal discipline for States.