Download Learnerz IAS app from the Play Store now! Download



Ways and Means Advances UPSC NOTE

 Why in news

  • The Reserve Bank of India increased the Ways and Means Advances (WMA) limits of State governments and Union territories to ₹60,118 crore from ₹47,010 crore effective July 1

Ways and Means Advances

  • The WMA scheme was introduced in 1997.

  • To meet mismatches in the receipts and payments of the government


  • The government can avail immediate cash from the RBI, if required. 

  • But it has to return the amount within 90 days

  • Interest is charged at the existing repo rate.

  • If the WMA exceeds 90 days, it would be treated as an overdraft (the interest rate on overdrafts is 2 percentage points more than the repo rate).

  • The limits for WMA (for Centre) are decided by the government and RBI mutually and revised periodically.

  • A higher limit provides the government flexibility to raise funds from RBI without borrowing them from the market.

  • There are two types of Ways and Means Advances — normal and special.

  • A Special WMA or Special Drawing Facility is provided against the collateral of the government securities held by the state.

  • After the state has exhausted the limit of SDF, it gets normal WMA.

  • The interest rate for SDF is one percentage point less than the repo rate.

  • The number of loans under normal WMA is based on a three-year average of actual revenue and capital expenditure of the state.


  • Need of immediate and large financial resources to deal with challenges such as covid 19 for states

  • WMA funding is much cheaper than borrowings from markets.



Amritsar,1,April 2024,301,Art & Culture,1,August 2023,251,Courses,7,Daily Current Affairs,48,December 2023,189,Disaster Management,2,Environment and Ecology,184,February 2024,228,Foundation Course,1,GDP,1,GEMS Club,1,GEMS Plus,1,Geography,188,Govt Schemes,2,GS 2,1,GS1,6,GS2,61,GS3,23,GST,1,History,10,Home,3,IAS Booklist,1,Important News,71,Indian Economy,164,Indian History,8,Indian Polity,183,International Organisation,12,International Relations,140,Invasive Plant,1,January 2024,240,July 2023,281,July 2024,159,June 2022,6,June 2023,268,June 2024,324,March 2024,238,May 2022,17,May 2024,330,Mentorship,2,November 2023,169,October 2023,203,Places in News,2,Science & Technology,121,Science and Technology,93,September 2023,205,UPSC CSE,111,
Learnerz IAS | Concept oriented UPSC Classes in Malayalam: Ways and Means Advances UPSC NOTE
Ways and Means Advances UPSC NOTE
Learnerz IAS | Concept oriented UPSC Classes in Malayalam
Loaded All Posts Not found any posts VIEW ALL Readmore Reply Cancel reply Delete By Home PAGES POSTS View All RECOMMENDED FOR YOU LABEL ARCHIVE SEARCH ALL POSTS Not found any post match with your request Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS PREMIUM CONTENT IS LOCKED STEP 1: Share to a social network STEP 2: Click the link on your social network Copy All Code Select All Code All codes were copied to your clipboard Can not copy the codes / texts, please press [CTRL]+[C] (or CMD+C with Mac) to copy Table of Content