Assam's growth rate declines, fiscal deficit, debts rose in 2019-20: CAG

Assam has recorded a decline in its growth rate while its fiscal deficit, outstanding debt and public debt have increased significantly at the end of 2019-20, a CAG report said

Assam has recorded a decline in its growth rate while its fiscal deficit, outstanding debt and public debt have increased significantly at the end of 2019-20, a Comptroller and Auditor (CAG) report on state finance for the period said on Friday.

The report, laid in the state Assembly on the last day of the Winter Session, said the GSDP of the state grew from Rs 2,27,959 crore in 2015-16 to Rs 3,51,318 crore (quick estimates) in 2019-20 with Compounded Annual Growth Rate (CAGR) of 11.42 per cent against the national CAGR of 10.37 per cent.

However, there was a decline in the growth rate from 16.47 per cent in 2015-16 to 11.22 per cent in 2019-20, it added.

It further said the state could achieve revenue surplus only during two years in the five year period from 2015-16 to 2019-20, and in containing the fiscal deficit below 3 per cent of GSDP in three out of five years in the same period.

During 2019-20, the fiscal deficit stood at 4.25 per cent of GSDP, which was significantly more than the limit of 3 per cent fixed under the Assam Fiscal Responsibility and Budget Management (AFRBM) Act.

The fiscal deficit which increased by 212.10 per cent from 4,779.06 crore in 2018-19 to Rs 14,915.80 crore in 2019-20, was the highest level of fiscal deficit since the enactment of the AFRBM Act in 2005, the report said.

It further said outstanding debt of the state rapidly increased from Rs 39,054.59 crore in 2015-16 to Rs 72,256.52 crore in 2019-20, with the debt/GSDP ratio increasing from 17.13 per cent to 20.57 per cent over the same period.

Public debt constituted 75 per cent of total state debt at the end of 2019-20 and it grew at the rate of 25.88 per cent during the year, the highest in the last five-year period, and also outpaced the growth rate of GSDP (11.22 per cent) during the year, the CAG report said.

It also pointed that the state government had taken recourse to market loans on several occasions during 2019-20 despite having large cash balances.

It further said committed expenditure like salary and wages, pensions and interest payments steadily increased during the five year of 2015-20.

The committed expenditure during 2019-20 was 64.32 per cent of the total revenue receipts and 62.23 per cent of total revenue expenditure.

Among the recommendations made by the audit body, it said the state government can make concrete efforts to augment own resources of revenue to bridge the mismatch between revenue receipts and expenditure, and reduce its fiscal deficit.

It also recommended the state government to take steps to rationalise its committed revenue expenditure, and use its cash balances for productive purposes and reduce market borrowings.