Telangana holds the second-highest amount of outstanding guarantees in the nation, totaling 1.35 lakh crore, according to the Reserve Bank of India's (RBI) state of finances document.
Uttar Pradesh takes the lead with outstanding guarantees amounting to 1.71 lakh crore, while Andhra Pradesh ranks third, boasting 1.17 lakh crore in outstanding guarantees.
Furthermore, in accordance with the Fiscal Responsibility and Budget Management rules, outstanding guarantees are subject to certain regulations. Consequently, during the BRS regime, the loan window available to the state was curtailed.
Against this backdrop, a significant question arises about how the new government under the leadership of Revanth Reddy will navigate this challenging terrain.
Outstanding guarantees represent loans secured by state-owned corporations from banks and other financial institutions.
Although the repayment is executed through the corporations, it is often perceived as a liability of the state government.
