The Governor of the Reserve Bank of India (RBI), Sanjay Malhotra, appealed to the states to enhance the quality of public spending, adopt cautious approaches to borrowing, and improve cash management, as well as utilize the Unified Lending Interface (ULI) and Programmable Central Bank Digital Currency (P-CBDC) for direct transfers.
These statements were made during the 36th conference of secretaries of state finance. The theme of the conference was dedicated to the role of expenditure quality, effective cash management, and prudent debt management in strengthening the financial stability of the states.
According to an RBI press release, the Governor emphasized the critical importance of maintaining high expenditure quality to ensure the long-term financial health of the states. Furthermore, Malhotra highlighted the necessity for states to adopt prudent borrowing strategies and effective cash flow management practices.
He strongly recommended that states integrate the Unified Lending Interface (ULI) and implement the Programmable Central Bank Digital Currency (P-CBDC) for Direct Benefit Transfers (DBT) to beneficiaries.
During the meeting, issues such as state market borrowings, short-term financial support from the Reserve Bank to states, and the adoption of the Issuance of Guidelines Strategy by states were discussed. States were also advised on how to effectively use the State Level Bankers' Committee (SLBC) forum.
At the conference, the Governor presented a brochure titled 'Consolidated Handbook on Cash and Debt Management for State Government Agencies.' This document provides a concise and understandable summary of relevant concepts, operational processes, and best practices in the field of cash and debt management.
The conference gathered finance secretaries from 27 states and three union territories, as well as senior officials from the Ministry of Finance of the Government of India, the Comptroller and Auditor General of India, as stated in the RBI announcement.