The Kerala Ceiling on Government Guarantees Act, 2003 (Act 30 of 2003)

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© 
Government of Kerala 
COZ ToGaood 
2003 
Reg. No. os]. mud 
KL/TV(N¥12/2003-2005 
  
KERALA GAZETTE 
ChOB MMTLOd 
EXTRAORDINARY 
aRMDowaaeme 
PUBLISHED BY AUTHORITY ' 
TOUHIC AID . aIMViavag|S}GM} Mm) 
Thiruvananthapuram, 17th September 2003 
Wednesday 2003 exronioncsmd 17 Wo, Vol. XLVHT 
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4 
GOVERNMENT OF KERALA 
Law (Legislation-A} Department 
NOTIFICATION 
No. 16552/Leg. A2/2003/Law. 
Dated, Thiruvananthapuram, 17th September, 2003 
26th Bhadra, 1925. 
  
In pursuance of clause (3) of Article 348 of the Constitution of India, the 
Governor is pleased to authorise the publication in the Gazette of the following 
translation in the English language of the Kerala Ceiling on Government 
Guarantees Act, 2003 (30 of 2003). 
By order of the Governor, 
A. T. Ionattus, 
Special Secretary (Law).
[Translation in English of “z00a-ac1 chog wactead omEral Bes 
AIBADUGN alti @yasG”" published under the authority of Governor.] 
ACT 30 OF 2003 
THE KERALA CEILING ON GOVERNMENT GUARANTEES ACT, 2003 
‘An Act to provide jor ceiling on Government guarantees and other matters 
connected therewith or incidental thereto. 
Preamble.— WHEREAS it is expedient to provide for ceiling on Government 
‘guarantees issued on behalf of the Government departments, public sector 
undertakings, local authorities, statutory boards, corporations and co-operative 
institutions and for promoting fiscal discipline of the State; 
BE it enacted in the Fifty-fourth Year of the Republic of India as follows:— 
1. Short title and commencement—{l) This Act may be called the Kerala 
Ceiling on Government Guarantees Act, 2002. 
(2} It shall come into force on such date as the Government may, by 
. notification in the Gazette, appoint. 
2. Definitions.—In this Act, unless the context ‘otherwise requires, 
‘ (a} “Government” means the Government of Kerala; 
(b) “Government guarantee” includes the guarantee piven by the 
State Government on behalf of the Government departments, public sector 
undertakings, local authorities, staiutory beards, corporations and co-operative 
institutions; , 
{c) “prescribed” means prescribed by rules inade under the Act; 
(d) “State” means the State of Kerala. 
3. Ceiling on Government Guarantees.—The total outstanding Government 
guarantees as on the first day of April of "any year shali not exceed rupees 
fourteen thousand crores. : 
4. Prohibition.—Notwithstanding anything contained in any other law for 
the time being in force, no Government guarantee shall be given in respect of a 
loan of any private individual, Institution or Company. 
3/4.327/2003/DTP. 
 
- 6 
5. Guarantee commission—{1) The Government shall charge a minimmn 
of 0.75 per cent per annum as guarantee commission, which shall not be waived 
under any circumstances. ‘ 
(2) Depending on the default risk of any project, the Government may, 
by notification in the Gazette, specify commission at an enhanced rate. 
; Explanation.—For the purpose of this section ‘default risk’ means the 
probability of defaalt by the borrower on whose behalf the Government 
guarantee is given, depending on the amount borrowed, the type of industry 
and the economic situations. 
(3) The guarantee given shall not be extended on the expiry of the — 
guarantee pericd unless the borrower had paid in full the guarantee commission 
due, to the government. 
6. Guarantee Redemption Fund.—(1) The Government shall, by | 
notification in the Gazette, constitute a fund called the Guarantee Redemption 
Fund. 
(2) The Guarantee commission charged under section 5 shall form the 
corpus of the Guarantee Redemption Fund and it shall be remitted in the Public 
Accounts of the State. . 
(3) The administration of Guarantee Redemption Fund shall be-in such 
manner as may be prescribed. 
7. Power of Government to make rules—{1) The Government may, by 
notification in the gazette, make rules for the purpose of carrying into effect the 
provisions of this Act. 
(2) Every rule made under this Act shall be laid, as soon as may be 
after it is made, before the Legislative Assembly while it is in session for a total _ 
period of fourteen days, which may be comprised in one session or in two 
successive sessions, and if, before the expiry of the session in which it is so laid 
or the session immediately following, the Legislative Assembly makes any 
modification in the rule, or decides that the rule should not be made, the mule 
shall thereafter have effect only in such modified form or be of no effect, as the 
case may be; sa however, that any such modification or annulment shall be 
without prejudice to the validity of anything previously done under that rule. 
  
PRINTED AND PUBLISHED BY THE SUPERINTENDENT OF GOVERNMENT PRESSES 
AT THE GOVERNMENT CENTRAL PRESS, THIRUVANANTHAPURAM, 2003

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