Assam CM claims state's borrowings much lower than others; has robust repayment capacity

In a comparison of Assam's borrowings to those of other states, Chief Minister Himanta Biswa Sarma stated on Wednesday that the state's ability to repay debts was strong. "Assam borrowings are much lower relatively in comparison to other states. Our debt – GDP ratio is very good and borrowings are within the limit of Fiscal Responsibility and Budget Management (FRBM). Our capacity to return loans is robust," tweeted Sarma.

The chief minister announced in the state Assembly on Wednesday that the Assam government would borrow Rs 14,000 crore this fiscal year and Rs 22,000 crore the following fiscal year. Sarma emphasised the importance of loans for the state's development. The Assam CM  denied allegations made by opposition parties that the government had taken loans beyond its capacity, saying the state could take on more borrowings and is capable of repaying them on time because Assam's Gross Domestic Product (GDP) has grown significantly over the last three years.

CM Sarma pointed out that the Assembly had enabled the state government to borrow 3.5% of the state's GDP in loans. Sarma pointed out that Assam's borrowing proportion as a percentage of GDP was far lower than states like Punjab (52.5%), West Bengal (35%), and Rajasthan (35%).

Assam's economy

Meanwhile, Assam Finance Minister Ajanta Neog stated on Tuesday that the state's cash inflow from the central government has increased after the state's special category status was revoked. She also stated that the state administration has been taking out loans from various sources in accordance with the parameters set by the Indian government and within its ability to repay. Neog was responding to a question from Independent member Akhil Gogoi during question hour in the state Assembly on whether the state's funding flow for various developmental initiatives has been hampered since special state status was revoked.

Only the nomenclature has changed, she noted. "In fact, we've been getting more money than ever before," she added. She also stated that there was no need for another proposal to grant Assam special category status because more funding has been flowing into the state than during the previous period.

(with inputs from ANI/PTI)