Hyderabad: 9.4%, Telangana has the highest government guarantees circulating as a percentage of state domestic products (GSDP) at the end of the 2019-20 fiscal year.
Andhra Pradesh’s neighbor is two seconds with 8%.
The latest financial statement report – 2021 shows that in addition to two Telugu countries, Rajasthan (8%), Chhattisgarh (5.4%) and Punjab (5.1%) made the top five states with extraordinary guarantees.
The average guarantee provided by the state is 3.3% of their aggregate GSDP at the end of 2019-20.
At least 16 countries are expected to ensure diskark loans of 1.36 lakh crore at 2020-21.
Reserve Bank of India (RBI) has observed that this obligation is a risk for state governments that have large debt and losses for state public sector companies (SPS.
Problems of the State Government guarantee loans of state public sector companies from financial institutions for various reasons, including When such a guarantee makes it simpler to get a loan.
Also, because there are fiscal constraints about the freedom to borrow by countries to meet the financing infrastructure requirements and offset the decline in capital expenditure, stating the resort to issue guarantees of developmental activities.
When the state government raises loans Directly, he attracts the provisions of the Fiscal Budget Management Law (FRBM).
State government requires the approval of the central government to increase debt if permission is based on the expected GSDP estimate.
Previously, considering the Pandemic Covid-19, The center allows the state to raise their budget deficit limit from 3% to 5% of GSDP at 2020-21.
But even a 2% increase was conditional, including the completion of reforms in four fields such as the ‘One State One State One Card Ransum’, the ease of doing business, the power distribution and augmentation of urban body income.
While at one country level is permitted to deficit, increase in guarantees, which are not exactly loans, causing state financial sustainability issues.
Max extraordinary government warranty in Telangana
