📷 Image: Wikimedia Commons / Ministry of Finance of India
Politics
Karnataka Minister Highlights Tightening of State Finances Due to Guarantee Schemes
✍️ India Today
🗓 28 Sep 2026, 07:33 PM
👁 15
Karnataka's finance minister has warned that state guarantee schemes are tightening the state's finances, citing rising debt obligations.
The Karnataka finance minister has warned that the state's guarantee schemes are tightening its finances.
The guarantee schemes, introduced to support banks' lending to small and medium enterprises, have increased the state's liability as banks seek coverage for potential defaults.
The minister said that the rising debt obligations are putting pressure on the state's fiscal position, prompting a review of the schemes' terms.
Officials said the state is exploring ways to balance support for the banking sector with fiscal prudence, including potential adjustments to guarantee rates.
The announcement comes as Karnataka continues to manage a growing fiscal deficit, with the state government looking for measures to curb debt growth.
The guarantee schemes, introduced to support banks' lending to small and medium enterprises, have increased the state's liability as banks seek coverage for potential defaults.
The minister said that the rising debt obligations are putting pressure on the state's fiscal position, prompting a review of the schemes' terms.
Officials said the state is exploring ways to balance support for the banking sector with fiscal prudence, including potential adjustments to guarantee rates.
The announcement comes as Karnataka continues to manage a growing fiscal deficit, with the state government looking for measures to curb debt growth.