The Reserve Bank of India, in consultation with the Government of India, has decided to retain the limit for the Ways and Means Advance to the Government of India at Rs.20,000 crore as against the limit of Rs.6,000 crore fixed for the second half of the current fiscal year 2008-09 (April to September) for a temporary period till December 31, 2008.

The temporary enhancement of the limit of WMA will help meet the unanticipated mismatches between government payments and receipts arising from the cancellation of two auctions scheduled for the month of October 2008, and the bunching of expenditure following the supplementary demand for grants.

BSC/SS/GN-297/08 Ways and Means Advance limit retained temporarily to address government cash flow mismatches from auction cancellations and expenditure bunching The Ways and Means Advance limit was retained at an elevated temporary ceiling until December 31, 2008, after consultation with the government. The measure is time bound and intended to provide short term liquidity accommodation to meet unanticipated mismatches between government payments and receipts caused by cancelled auctions and the bunching of expenditure following a supplementary demand for grants.