The state government guarantees stood at ₹2.41 lakh crore at the close of FY 2024‑25, up by ₹21,000 crore from the start of the year.
Key Developments
- New guarantees added: ₹57,304 crore; guarantees repaid (deleted): ₹36,999 crore.
- Largest share went to the Irrigation department with ₹81,763 crore (addition ₹1,388 crore, deletion ₹2,165 crore).
- Power sector guarantees rose to ₹47,578 crore (addition ₹11,921 crore, deletion ₹4,983 crore).
- Urban Development and Housing schemes accounted for ₹13,573 crore (addition ₹782 crore, deletion ₹1,300 crore).
- Other infrastructure works: ₹10,671 crore, of which ₹10,380 crore were newly granted.
- Guarantees for “other works” up to February 2025: ₹77,670 crore (addition ₹25,737 crore, repayment ₹21,979 crore).
Important Facts
The figures are drawn from the Finance Accounts 2024‑25 audited by the CAG and presented in the Legislative Assembly on 30 March 2026. The CAG noted that the statement relied on the budget document of FY 2025‑26 because the state had not disclosed the maximum guaranteed amount nor separated principal and interest components. Consequently, the CAG flagged non‑compliance with IGAS‑1.
The report also highlighted a discrepancy between the opening balance for FY 2024‑25 and the closing balance for FY 2023‑24, without any explanation. The outstanding amount includes ₹1.17 lakh crore of loans raised by SPVs/corporations/institutions but serviced by the state.
Exam Relevance
Understanding the scale and composition of state guarantees is vital for GS‑3 (Economy) questions on fiscal federalism, state‑level borrowing, and public‑sector risk. The CAG’s observation on IGAS‑1 compliance underscores the importance of audit standards and accountability mechanisms, topics frequently asked in the “Public Finance” and “Financial Management” sections. Moreover, the heavy weighting towards irrigation and power projects reflects the state’s developmental priorities, linking to infrastructure policy and sustainable development discussions.
Way Forward
- State should disclose the total guaranteed amount and clearly segregate principal‑interest components to meet IGAS‑1 requirements.
- Regular, transparent reporting of guarantees invoked and discharged will enable better fiscal monitoring.
- Policymakers need to assess the risk‑return profile of guarantees, especially in capital‑intensive sectors like irrigation and power, to avoid undue fiscal stress.
- Strengthening audit follow‑up and corrective action based on CAG observations can improve fiscal discipline across states.