Reserve Bank extends overdraft to govt till December

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New Delhi, Nov 12 (UNI) The Reserve Bank of India has retained the facility to provide ways and means advances of Rs 20,000 crore to Central government till December 31 for the second half of current fiscal to enable it meet the gap between expenditure and receipts.

The government's limit of this facility was Rs 6,000 crore but this "temporary enhancement" will help government meet unanticipated mismatches between government payments and receipts arising from the cancellation of two auctions last month and bunching of expenditure following supplementary demand for grants, Finance Ministry said in a statement today.

Parliament had passed these supplementary demand for grants during its brief sesssion last month.

Ways and means advances are temporary overdrafts extended by RBI to enable Central or State government to bridge the interval between expenditure and receipts. Such advances are meant to enable governments to tide over temporary difficulties that arise on account of mismatch or shortfall in revenue or other receipts for meeting government's liabilities.


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