Live
- Niranjan Reddy Slams Jupally Krishna Rao and Government Over Irrigation Incompetence
- Gardner reflects on Australia's dominant year after ODI series sweep over NZ
- Pushpa Producer Naveen Yerneni Donates Rs. 50 Lakhs to Family of Victim in Sandhya Theater Incident
- NC MP holds anti-reservation protest outside J&K CM’s residence
- Inflation burden eases for farm and rural labourers
- Delhi BJP releases 'chargesheet' against Kejriwal, AAP govt
- The First 40 Days: Sonnalli Seygall’s Thoughts on Traditional Postpartum Care
- CM Nitish Kumar embarks on Pragati Yatra from West Champaran, begins development drive in Bihar
- Rozgar Mela: Recruits from Patna, Panchkula express gratitude to PM Modi for appointment letters
- Tabling CAG reports: BJP legislators move Delhi HC for special Assembly sitting
RBI wants ceiling for state govts’ guarantees to be fixed at 5% of revenue
Reserve Bank of India
The Reserve Bank of India (RBI) on Tuesday recommended that state governments should consider fixing a ceiling for incremental guarantees that they issue during a year at 5 per cent of Revenue Receipts or 0.5 per cent of Gross State Domestic Product, whichever is less.
Mumbai: The Reserve Bank of India (RBI) on Tuesday recommended that state governments should consider fixing a ceiling for incremental guarantees that they issue during a year at 5 per cent of Revenue Receipts or 0.5 per cent of Gross State Domestic Product, whichever is less.
The RBI has also recommended that state governments may consider charging a minimum guarantee fee for guarantees extended and additional risk premium may be charged based on the risk category and the tenor of the underlying loan.
It said that besides, state governments may publish data relating to guarantees, as per the Indian Government Accounting Standard (IGAS).
The RBI recommendations also said that the word ‘Guarantee’ should include all instruments, which create an obligation, contingent or otherwise, on part of the state government and the purpose for which government guarantees are issued should be clearly defined.
The implementation of these recommendations made by the RBI’s Working Group is expected to facilitate better fiscal management by the state governments.
The RBI has placed the report of the Working Group on State Government Guarantees on its website.
During the 32nd Conference of the State Finance Secretaries held on July 07, 2022, it was decided to constitute a Working Group comprising members drawn from the Ministry of Finance, Government of India; Comptroller and Auditor General of India; and some State Governments.
The terms of reference of the Working Group included, inter alia, prescribing a uniform guarantee ceiling for the States; uniform reporting framework for the guarantees given by the State Governments; assessing the adequacy of states’ contribution to the Guarantee Redemption Fund, etc.
