RBI Governor asks states to improve spending quality and borrow carefully
28 October 2026 · 2 min read · HireHo
Based on Business Standard and Elets BFSI reports dated 27 October 2026, summarised in HireHo's own words. Summarised in our own words.
36thConference of State Finance Secretaries
27 + 3states and Union Territories present
RBI Governor Sanjay Malhotra spoke to state finance secretaries in Mumbai on 27 October 2026. The conference theme was the role of quality of expenditure, effective cash management and prudent debt management in states' fiscal sustainability.
What he asked states to do
- Improve the quality of spending, which he called essential for long-term fiscal health.
- Take a careful and measured approach to borrowing.
- Manage cash more efficiently.
- Join the Unified Lending Interface (ULI), an RBI-backed platform that lets lenders access consent-based data to widen formal credit.
- Use programmable central bank digital currency (P-CBDC) for direct benefit transfers. Conditions can be built into the digital rupee so money is used for a set purpose, by a set person or within a set time.
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Finance secretaries from 27 states and three Union Territories attended, along with senior officials of the Finance Ministry, the Controller General of Accounts and the CAG.
What this means for you
- State budgets pay for roads, schemes and contractor bills. Steady state finances support local construction and services work.
- Easier access to formal credit through ULI may help small businesses and farmers, who are big employers.
These are the Governor's recommendations to states. They are not new rules.
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SourcesBusiness Standard: Expenditure quality key to states' long-term fiscal health, RBI GovernorElets BFSI: RBI Governor urges states to onboard ULI, use programmable CBDC for DBTHireHo explains these reports in its own words. Figures belong to the sources above.
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