Maharashtra Issues Record ₹62,569 Crore in Bank Guarantees for FY25; Total Exposure Crosses ₹1.44 Lakh Crore

Maharashtra’s fiscal burden continues to mount as bank guarantees provided by the state government surged to a historic high of ₹62,569 crore during FY2024–25. This dramatic rise is linked to public sector undertakings seeking financial support amid delayed state payments and expansive development plans.

Record Guarantees Back PSU Loans and Infra Projects

The ₹62,569 crore figure represents state-backed guarantees for multiple PSU borrowings. Leading this list is the Maharashtra State Electricity Distribution Company Limited (MSEDCL), which secured ₹35,469 crore to clear outstanding dues with key power firms, including Rural Electrification Corporation and Power Finance Corporation. 

Additionally, ₹15,000 crore was guaranteed for the Maharashtra State Road Development Corporation for land acquisition in the Virar–Alibaug Multimodal Corridor. The Mumbai Metropolitan Region Development Authority got a ₹12,000 crore guarantee for infrastructure financing, while the Shabari Tribal Development Corporation was backed for ₹100 crore towards social schemes.

Mounting Guarantees Hint at Indirect State Liabilities

Several PSUs were forced to resort to loans due to the state government's delayed financial obligations. For instance, MSEDCL claims unpaid dues for providing subsidies on electricity to farmers. As the government opts for welfare-driven schemes such as Ladki Bahin, financial pressures grow and lead organisations to borrow often with state guarantees, creating quasi-debt liabilities for the state.

Read More: India May Issue New Banking Licences After a Decade!

Total Guaranteed Exposure Reaches ₹1.44 Lakh Crore

With the latest addition, Maharashtra’s total outstanding bank guarantees have risen from ₹66,726 crore in FY2022–23 to ₹81,507 crore in FY2023–24 and now to an unprecedented ₹1.44 lakh crore in FY2024–25. These rising figures highlight the growing indirect debt that may not be reflected in traditional debt metrics but affects overall state fiscal health and investor outlook.

Credit Rating and Debt Management Challenges Ahead

As the guaranteed liabilities expand, concerns are being raised over potential impacts on the state's credit rating. With estimated public debt expected to rise to ₹9.32 lakh crore in FY2025–26, financial prudence and effective debt management remain crucial to maintaining economic stability.

Conclusion

Maharashtra’s record-high bank guarantees underline the financial stress among PSUs and signal rising indirect liabilities for the state. These factors could impact long-term fiscal health and market confidence if proactive measures aren’t taken.

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