Shravan Dikshith | ಶ್ರವಣ್ ದೀಕ್ಷಿತ್

Sheesh... it's incredible the number of dumb people who don't understand what sovereign guarantee means & what the central government is giving here. You dont understand how finance works? Fine, just don't show your stupidity for the world to mock.

For all those who doesn't the understand what the "Guarantee" here is the bellow how it works of SPV's Government of India (GoI) manages the financial risk it takes when it helps a Special Purpose Vehicle (SPV) borrow money. An SPV is a separate legal entity created for a specific project (like a Metro rail line). Because these projects are massive and risky, banks are often unwilling to lend to an SPV based on its own credit alone. To make the loan possible, the GoI provides a sovereign guarantee, which is a legal promise that if the SPV fails to pay back the loan, the central government will pay it instead. The Guarantee Fee is essentially an insurance premium that the SPV must pay to the government in exchange for this promise. The government does not provide these guarantees for free because they create a "contingent liability" on the national budget. Under the rules , the mechanism works as follows: Rule 279 of the General Financial Rules (GFR), 2017, establishes the general principle that the government should only provide guarantees when absolutely necessary and that these guarantees must be backed by a fee. It ensures that the government is compensated for the risk it is absorbing. The Government Guarantee Policy, 2022, provides the modern operational framework. It specifies how the fee is calculated, how it is collected, and the conditions under which a guarantee is granted. It aims to ensure that the SPV remains financially disciplined and does not rely solely on the government's creditworthiness without contributing to the cost of that risk. In practice, when an SPV (such as those managed by BMRCL) raises a loan from a bank, the GoI signs a guarantee agreement. The SPV then pays a percentage of the guaranteed amount as a fee to the GoI, usually on an annual basis, until the loan is repaid.

Let me explain how Congress manufactured its imaginary 84% share in Namma Metro’s funding. Of the ₹77,891 crore project cost, ₹28,958 crore consists of foreign loans given to BMRCL, backed by the Centre’s sovereign guarantee. These are loans to BMRCL, repayable by BMRCL. NOT loans to the Karnataka Government or funds contributed from its budget. But Congress conveniently treats this entire amount as its own financial contribution, as though the State Government borrowed the money and will repay it! That’s how they manufactured the 84% figure. Remove this ₹28,958 crore from their claimed State contribution, and the State’s share falls to 46.6%. The remaining 53.4% includes Centre-backed institutional financing, not merely direct Central funding. The real financing picture is approximately 54 : 46., not Congress’s imaginary and fudged 16: 84! Before lecturing others on economics, Congress should learn some basic accounting.