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Politics
Karnataka Deputy CM Warns Guarantee Schemes Strain State Finances
✍️ The Hindu
🗓 28 Sep 2026, 07:38 PM
👁 16
The Deputy Chief Minister of Karnataka has highlighted that the state's guarantee schemes are putting a significant strain on its finances, urging a review of the policy.
The Deputy Chief Minister of Karnataka addressed the media today, expressing concerns that the state's guarantee schemes are exerting a heavy burden on public finances. He noted that these schemes, designed to support various sectors, have led to increased fiscal liabilities.
Guarantee schemes typically involve the state backing loans or providing financial support to businesses and institutions. While they aim to stimulate growth, the cumulative cost of these guarantees has risen sharply over recent years.
According to the Deputy CM, the mounting obligations are contributing to a widening fiscal deficit and increasing the need for borrowing. This trend, he warned, could compromise the state's ability to fund essential services.
He called for a comprehensive review of the guarantee framework, suggesting that reforms be introduced to balance support for development with fiscal prudence.
Guarantee schemes typically involve the state backing loans or providing financial support to businesses and institutions. While they aim to stimulate growth, the cumulative cost of these guarantees has risen sharply over recent years.
According to the Deputy CM, the mounting obligations are contributing to a widening fiscal deficit and increasing the need for borrowing. This trend, he warned, could compromise the state's ability to fund essential services.
He called for a comprehensive review of the guarantee framework, suggesting that reforms be introduced to balance support for development with fiscal prudence.