States may not borrow as much as they wanted. But that may not be a problem.

livemint.com:

₹9.76 trillion of the targeted ₹10.88 trillion, according to data from Reserve Bank of India (RBI). In FY23, the ₹7.78 trillion raised from SDLs had fallen short of the targeted ₹9.96 trillion. In a case resembling a year-end sale, 18 states have offered to auction SDL stock for a cumulative ₹60,032.49 crore in the current fiscal’s final weekly auction on 26 March, according to the RBI.

But even that is unlikely to help achieve the target. The more-than-expected proceeds from goods and services tax (GST) and release of a large chunk of 50-year interest-free loans from the Centre in the current fiscal have likely given states the financial space without having to raise more from the markets, said a finance ministry official, who spoke under the condition of anonymity. “It’s important for states to be fiscally prudent even in the face of looming elections," the official added.

In addition, as of 31 December 2023, (Q3, FY2024), the Centre had released about ₹60,104 crore in interest-free, capital expenditure loans to states, out of the ₹80,000 crore earmarked for this fiscal year, according to finance ministry data. Meanwhile, the total gross GST collection so far during the current fiscal (April 2023-February 2024) stood at ₹18.40 trillion, 11.7% higher than the mop-up for the same period last fiscal. The budget estimates (BE) for FY25 has pegged states’ share of tax devolution at ₹12.2 trillion, an increase of over 10.4% to the amount devolved in FY24, according to the revised estimates for the fiscal.