(MENAFN- KNN India)
Hyderabad,
Dec 24 (KNN) The Reserve bank of India's latest report on "State Finances - A Study of Budgets of 2024-25" has uncovered significant variations in Telangana's reported outstanding guarantees, showing figures substantially higher than previously disclosed.
According to the RBI report released on December 19, the state's total outstanding guarantees reached Rs 2,14,705 crore by March 2023 and Rs 2,20,606 crore by March 2024.
These figures stand in stark contrast to the state's budget document for 2023-24, presented by former Finance Minister T Harish Rao, which reported outstanding guarantees of merely Rs 38,867 crore as of January 31, 2023.
The substantial difference emerged from the previous government's practice of assigning lower risk weights to guarantees provided to various Special Purpose Vehicles (SPVs), Corporations, and Institutions.
Chief Minister A Revanth Reddy highlighted this discrepancy during the recent Assembly winter session, citing the example of Kaleshwaram Irrigation Project Corporation Limited.
While the previous administration reported guarantees of Rs 16,162 crore by applying a 25 percent risk weight, the actual outstanding guarantees amounted to Rs 64,651 crore.
The disparity in reporting has drawn attention from the RBI's working group on state government guarantees.
In its report submitted on January 16, 2024, the group specifically noted that some states were under-reporting guarantee amounts by assigning risk weights significantly below 100 percent.
In response, the working group has recommended maintaining a minimum risk weight of 100 percent for all state government guarantees.
These outstanding guarantees are separate from the state's total outstanding liabilities, which increased from Rs 3,49,727 crore in March 2023 to Rs 3,93,286 crore by March 2024.
Following the RBI working group's recommendations, the state's 2024-25 budget now assigns 100 percent risk weights to all outstanding guarantees, providing a more accurate representation of Telangana's financial commitments.
(KNN Bureau)
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