The off-balance sheet borrowings incurred after fiscal year 2021 will continue to be adjusted over the next three financial years, said one of the sources. However, from here on, any new off-balance sheet borrowings will be adjusted in the same year or the year after they have been incurred, the source added. In one year, the adjustment from borrowing requirements will not be more than 0.25% of gross state domestic product, said a the second source. Reuters GraphicsLower market borrowing by state governments was one factor that helped keep federal government bond yields in check in 2022-2023. State governments also had high cash balances at the start of the previous year, which helped bring down borrowings, said ICRA.

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