At Rs 1.3 lakh cr, Telangana trails only UP in outstanding guarantees | Hyderabad News

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HYDERABAD: Telangana has the second highest outstanding guarantees in the country (till 2022) as per the latest Reserve Bank of India (RBI) state of finances document 2023-24 released on Monday.
The document put Telangana with 1.35 lakh crore outstanding guarantees. Uttar Pradesh topped the charts with 1.71 lakh crore outstanding guarantees. Andhra Pradesh stood third with 1.17 lakh crore outstanding guarantees.

Formation

The figures reveal that the three states of Uttar Pradesh, Telangana and Andhra Pradesh alone account for a major share in outstanding guarantees while the entire country had 4.07 lakh crore outstanding guarantees.
Telangana’s outstanding guarantees touched 1 lakh crore mark in 2021 from just 62,822 crore in 2014 when the new state was carved out.
The Centre and the former BRS government were involved in a bitter wrangle over outstanding guarantees with the latter opposing the Centre’s new rule that outstanding guarantees were subjected to the Fiscal Responsibility Budget Management (FRBM) rules. As a result, the loan window available to the state was reduced much to the chagrin of the former BRS regime.
After assuming power, the Congress government announced that it will release a white paper on state’s finances soon. Taking a dig at the previous government, minister Bhatti Vikramarka said the actual numbers on outstanding guarantees could be very high.
Outstanding guarantees are loans taken by the state-owned corporations from banks and other financial institutions. The state government provides guarantee to these loans though the repayment is made through the corporations and is often considered as a liability of the state government.



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