Odisha, along with states such as Karnataka and Arunachal Pradesh, has significantly increased its investments in Treasury bills (T-Bills) during the April–June quarter, reports said on Monday.
Experts explain that these states are parking their temporary cash surpluses in highly liquid and low-risk instruments like T-Bills, which provide safety, easy liquidity, and quick redemption options.
According to RBI data, Karnataka leads the surge, with Rs 70,654 crore invested in June, slightly higher than Rs 70,642 crore in May and a significant jump from Rs 50,177 crore in April. Odisha’s exposure has tripled, rising from Rs 4,285 crore in April to Rs 8,258 crore in May, and further to Rs 12,236 crore in June.
Similarly, Arunachal Pradesh’s holdings climbed steadily from Rs 1,800 crore in April to Rs 2,300 crore in May and Rs 3,400 crore in June.
“States’ rising exposure to T-Bills reflects seasonal cash flow patterns. With expenditure commitments often staggered through the fiscal year, they tend to deploy idle funds into short-duration instruments like T-Bills, offering both security and quick access to cash. It also indicates a more conservative treasury strategy focused on capital protection,” a report by Moneycontrol said, quoting Venkatakrishnan Srinivasan, Founder and Managing Partner at Rockfort Fincap LLP.
Analysts note that states often receive lump-sum inflows from tax devolution and central transfers, while actual spending on salaries, subsidies, and capital projects occurs gradually. This mismatch between inflows and outflows creates a temporary surplus, prompting the need for safe parking avenues.
The shift toward short-term T-Bills also reflects a more conservative treasury stance, with states prioritizing liquidity and flexibility amid revenue uncertainties, ongoing GST reforms, and fluctuating fiscal dynamics.
