MSS: RBI auctions to raise Rs2,500 crore
Mumbai: The Reserve Bank of India will raise Rs2,500 crore by way of auction of 182-day and 91-day Government of India treasury bills under the Market Stabilisation Scheme.

While Rs1,000 crore will be raised through the auction of 182-day T-bills, the remaining amount of Rs1,500 crore will be raised through the auction of 91-day T-bills.

The RBI also proposes to raise Rs1,000 crore through the regular auction. While Rs500 crore will be raised through the auction of 182-day T-bills, the balance Rs500 crore will be raised through auction of 91-day T-bills.

The auction will be conducted using `Multiple Price Auction' method. The allocation to non-competitive bidders will be outside the notified amount, at the discretion of RBI.
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RBI asks states to enact law for fiscal responsibility
New Delhi: Ahead of a meeting aimed at improving the fiscal health of states, the Reserve Bank of India has said that states need to enact fiscal responsibility laws as the present corrective measures "lacked statutory backing".

The meeting, to be held in Mumbai on April 8, will be jointly organised by RBI and Finance Ministry and will discuss the deteriorating financial position of the states.

The agenda for the meeting includes a discussion on the road map for bringing in a fiscal legislation along the lines of Centre's Fiscal Responsibility and Budget Management Act. In a recent bulletin RBI had cautioned that unless there was political commitment to adhere to a sustainable fiscal adjustment process enshrined in the fiscal legislation act, the rules could be "bypassed and policies reversed to the detriment of the long term financial health of states."

"Persistently large revenue deficit had led to higher fiscal deficit and build-up of large debt stock. Consequently, a vicious cycle of deficit, debt and debt service payments has emerged," the banking regulator said in its latest bulletin.

The contingent liabilities of the states have also increased, thus leading to fiscal stress, which "seriously" constrained their ability to discharge the primary responsibility of developing social and economic infrastructure, RBI said.
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