RBI panel recommends 11.2% hike in states' WMA limit

An RBI Advisory Committee has recommended an 11.2% increase in the average Ways and Means Advance (WMA) limit for states, proposing to raise the aggregate WMA limit from the existing ₹61,008 crore to ₹67,839 crore. The committee, established on April 30, 2026, cited states' growing budget sizes as justification for the higher liquidity support requirement from the Reserve Bank of India.

The committee noted a significant shift in how states access temporary financial accommodation. While WMA was historically the principal mechanism through which states secured short-term funds, the Special Drawing Facility (SDF) has emerged as the main window for liquidity support in recent times. This changing pattern reflects evolving dynamics in state cash flow management and borrowing practices.

In revising WMA limits, the committee determined that adjustments need not precisely match the exact trend in which states' fiscal parameters have changed over the period. Instead, the revised limits should consider the overall liquidity support available to states, recognizing both traditional WMA mechanisms and the growing prominence of SDF as complementary tools for state financial accommodation.