RBI sets Ways and Means Advances for Govt. of India at ₹50,000 Crore for Second Half of FY 2025-26
RBI had fixed the WMA limit for the central government at a significantly higher ₹1.5 lakh crore for the first half of FY 2025-26.
RBI - WMA - Taxscan
RBI - WMA - Taxscan
The Reserve Bank of India (RBI), in consultation with the Government of India has fixed the Ways and Means Advances (WMA) limit at ₹50,000 crore for the second half of the financial year 2025-26 - covering the period from October 2025 to March 2026.
The announcement was made by the central bank through Press Release No. 2025-2026/1185 dated September 26, 2025. In connection with the allocated limit, the RBI has maintained that once the government utilises 75% of this sanctioned limit, it may trigger fresh floatation of market loans. RBI has also stated that it retains the flexibility to revise the WMA limit at any point, depending upon prevailing circumstances.
The interest rate on WMA will be aligned to the prevailing Repo Rate, while overdrafts beyond the sanctioned limit will attract a rate two percentage points above the Repo Rate.
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What are Ways and Means Advances?
Ways and Means Advances are temporary advances provided by the RBI to the Centre and States to ease short-term mismatches in cash flows. They act as a contingency credit line, helping the government meet immediate expenditure obligations without resorting to abrupt market borrowing. By design, WMAs are short-term credit functions which are automatically adjusted as per revenue inflow, making them a flexible tool for managing fiscal liquidity.
For the first half of FY 2025-26, the RBI had fixed the WMA limit for the central government at a significantly higher ₹1.5 lakh crore. Reducing the limit to ₹50,000 crore in the second half is indicative of a calibrated move by the RBI to balancing temporary fiscal support with the need for maintaining market discipline.
Media reports highlight that this sequential adjustment reflects the central bank’s strategy of accommodating government liquidity needs in H1, followed by tighter reliance on market borrowings in H2.
In effect, the Ways and Means Advances facility continues to serve as a critical but conditional financial backstop for the Government, but the utilization of the newly allocated limits and subsequent market borrowings will depend on the government’s cash flow requirements and macroeconomic conditions in the latter half of the financial year.
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