Question

The "Ways and Means Advances" by the RBI to the state governments are primarily for:

• A. Financing long-term infrastructure projects
• B. Implementing new social welfare schemes
• C. Bridging temporary mismatches in cash flow
• D. Managing foreign exchange reserves

Answer 1

Answer:

C. Bridging temporary mismatches in cash flow

• Ways and Means Advances (WMA) are temporary loans provided by the Reserve Bank of India to the central and state governments to help them manage their cash flow and bridge temporary shortfalls