(1) The total outstanding government guarantees as on the first day of April of any year shall not exceed 25 per cent of the Gross State Domestic Product estimated for the year.
(2) The total fresh government guarantees given in a year shall not exceed 3 per cent of Gross State Domestic Product estimated for the years.
Provided that under extreme exigencies and occurrence of natural calamities of the order which require the government to take immediate fiscal policy measures, the government may exceed the ceilings prescribed under Sub-Sections (1) and (2).
4. Notwithstanding anything contained in any other acts:
(1) Government guarantee shall ordinarily be extended by the Government on behalf of Departmental Undertakings, Public sector Undertakings, Local Authorities, Statutory Boards & Corporations, Co-operative Institutions and other Authorities and Agencies under the Government.
Provided that no government guarantees shall be extended to co-operative sector unless the share capital contribution from the non-government sources is not less than ten per cent of the total equity proposed.
(2) No Government guarantees shall be given in respect of any loan of any individual, private institutions or private companies.