The MIZORAM CEILING ON GOVERNMENT GUARANTEES ACT, 2011

The Mizoram GazetteEXTRA ORDINARY
VOL - XL    Aizawl,    Tuesday     19.7.2011      Asadha     28,   S.E.   1933,   Issue  No. 301
Published by Authority
RNI No. 27009/1973                    Postal Regn. No. NE-313(MZ) 2006-2008 Rs. 1/- per page
NOTIFICA TION
No.H.12018/219/2011-LJD, the 15th July, 2011.   The following Act of the Mizoram Legislative
Assembly which received the assent of the Governor of Mizoram is hereby published for general information.
THE MIZORAM CEILING ON GOVERNMENT GUARANTEES ACT, 2011
(Act No. 9 of 2011)
{Received the assent of the Governor of Mizoram on the 15th July, 2011}
AN
ACT
to provide for regulation of Government guarantees and other matters connected
therewith or incidental thereto
Whereas it is expedient to provide for regulation of Government
guarantees issued on behalf of the Government Departments, Pub-
lic Sector Undertakings, Local Authorities, Statutory Boards &
Corporations and Co-operative Institutions and for promoting fis-
cal discipline of the State;
It is enacted by the Mizoram State Legislative Assembly in the sixty
second year of the Republic of India, as follows :
1. (1) This Act may be called “the Mizoram Ceiling on Gov-
ernment Guarantees Act, 2011”
(2) It shall come into force on such date as the Govern-
ment may by notification in the Official Gazette, ap-
point.
Short title and
Commencement :
Preamble :
In this Act, unless the context otherwise re-
quires :
2. (1) ‘Government’ means the Government of Mizoram.
(2) ‘Government Guarantee’ includes the guarantee given
by the State Government on behalf of Departmental
Undertakings, Public Sector Undertakings, Local Au-
thorities, Statutory Boards & Corporations, Co-op-
erative Institutions and other authorities and agencies
under the Government of Mizoram.
(3) ‘prescribed’ means prescribed by rules made under
the Act.
(4) ‘State’ means the State of Mizoram.
3. (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 esti-
mated 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 occur-
rence of natural calamities of the order which require
the government to take immediate fiscal policy mea-
sures, the government may exceed the ceilings pre-
scribed 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 Un-
dertakings, Public sector Undertakings, Local Authori-
ties, Statutory Boards & Corporations, Co-opera-
tive Institutions and other Authorities and Agencies
under the Government.
Provided that no government guarantees shall be ex-
tended 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.
5. (1) The Government shall charge a minimum of  0.75  per
cent of the amount of guaranteed loan as guarantee
commission, which shall not be waived under any cir-
cumstances.
Guarantee
Commission :
Restrictions on
government
guarantees :
Ceiling on
Government
Guarantees :
Definition :
Ex-301-2011 2
(2) Depending on the default risk of the project the Gov-
ernment may, by notification, specify commission at
an enhanced rate.
For the purpose of this section ‘default risk’ means the
probability of default by the borrower on whose be-
half the Government Guarantee is given, depending on
the amount borrowed, the type of industry and the
economic situations.
6. (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. (1) The Government may, by notification in the Mizoram
Gazette, make rules for the purpose of carrying into
effect the provisions of this Act.
(2) Every rule made under the this Act shall be laid, as
soon as may be after it is made, before the Legislative
Assembly of Mizoram, 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, be-
fore the expiry of the session in which it is so laid or
the sessions immediately following, the Legislative As-
sembly of Mizoram makes any modification in the rule,
or decides that the rule should not be made, the rule
shall thereafter have effect only in such modified form
or be of no effect, as the case may be. However, that
any such modification or annulment shall be without
prejudice to the validity of anything previously done
under that rule.
Sd/-Secretary,
Law & Judicial Department,
Govt. of Mizoram.
Published and Issued by Controller, Printing & Stationery Department, Government of Mizoram
Printed at the Mizoram Government Press,  Aizawl.   C/650
Power of
Government
t o m a k e r u l e s :
Guarantee
Redemption
Fund :
Ex-301-20113
Explanation

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