While Assam Chief Minister Himanta Biswa Sarma claims that Assam will surpass the GDP of Punjab within the next three years, the opposition is constantly alleging that the state is in major debt.
The per capita debt burden of Assam is estimated at Rs 26,771 after the close of the financial year 2021-22.
According to state Finance Minister Ajanta Neog, the per capita debt burden has almost doubled in the last five financial years.
However, Neog also stated that according to quick estimates, per capita income was Rs 1,02,965 and GDP was Rs 4,12,162 crore, which registered a growth rate of over 16 per cent in 2021-22.
As per the data provided by the state Finance Minister, the Assam government borrowed Rs 12,753 crore ($1.385 billion) from the market for development projects during 2021-2022.
Financial institutions have provided Rs 94 crore for the construction of rural infrastructure, and the Central government has loaned Rs 157.34 crore for the implementation of development projects, Rs 600 crore for capital project implementation, and Rs 2,252.10 crore from the state provident fund.
The opposition has alleged that to continue with Himanta Biswa Sarma’s populist schemes, Assam has fallen into serious debt.
The Trinamool Congress president in the state, Ripun Bora, told IANS: “Assam’s outstanding loans stood at Rs 1,34,000 crore at the end of the previous financial year. In 2016, before the BJP came to power in the state, Assam had only Rs 35,000 crore in total borrowings.”
He also alleged that, despite taking a huge loan, the state government is unable to clear the dues of contractors working on various government projects.
“Payments worth Rs 22,000 crore due to contractors have been pending for a long time. The state government cannot even pay the salaries of contractual government employees on time,” Bora added.
According to the Trinamool Congress leader, Assam will soon face a huge crisis.
Another opposition MLA, Akhil Gogoi, claimed that the economic condition of Assam is going to be like that of Sri Lanka in the near future. He further alleged that due to financial indiscipline, the Centre has stopped sanctioning loans to the Assam government.
However, Ajanta Neog has turned down the allegations of the opposition leaders. She said that state governments borrow money in accordance with the RBI’s rules and the 2003 FRBM (Fiscal Responsibility and Budget Management) Act of the states.
The minister further claimed that in accordance with RBI standards, the state government did not borrow the maximum amount possible. According to her, the government uses the loan proceeds for state development.
Notably, in the previous year, the Assam government passed a bill to increase its debt-to-gross state domestic product (GSDP) ratio.
That time, Congress, AIUDF, and one independent MLA in the house staged a walkout in protest over the increase in government loans, but the Assam Fiscal Responsibility and Budget Management (AFRBM) (Amendment) Bill, 2022, was passed by voice vote.
With the bill’s adoption, the debt-to-gross domestic product (GSDP) ratio will rise from the current 28.5 per cent to 32 per cent over the following five fiscal years, starting in 2022-2023.
The additional borrowing maximum has also been increased by 0.50 per cent of the gross domestic product (GSDP), above and beyond the mandated cap of 4 per cent for 2022-23 to 2024-25.
Meanwhile, the Comptroller and Auditor General (CAG) of India also recently criticised the Assam government for the rise in borrowings.
It pointed out that Assam’s outstanding debt has “rapidly increased” from Rs 49,274.88 crore in 2017-18 to Rs 99,918.54 crore in 2021-22.
A CAG report said: “In view of the increasing growth rate of its public debt, the state government may make efforts to augment its own revenues and reduce its revenue expenditure so as to avoid pressure on repayment of public debt and interest liabilities.”
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