Assam to inherit its own debt legacy

Gogoi says finances stable, treasury was empty in 2001.

The new Assam government under Tarun Gogoi will inherit a debt of Rs 21,000 crore, which is around 27 per cent of Assam’s state gross domestic product (GSDP). However, with the Congress being in power in the last two terms, it would be like inheriting its own legacy.

In the last few years, the expenditure on debt repayment amounted to 2.5 per cent of GSDP of Assam, which was higher than the allocations made to some vital sectors such as public health and higher education.

“The claim of Chief Minister Tarun Gogoi that Rs 5,000- 6,000 crore is lying in the treasury is misleading, as it is not revenue earning, but loan from financial institutions such as International Monetary Fund, World Bank, Asian Development Bank and others. Every child born in Assam inherits a debt of Rs 22,000” said Asom Gana Parishad (AGP) leader and ex-Chief Minister Prafulla Kumar Mahanta, indicating finances of the state were in wrong hands.

However, the Congress that came to power in 2001, claims to have improved the financial condition of the state since then. According to the party, the finances of the state were in dire straits under the erstwhile AGP government.

“The Congress inherited an empty treasury in 2001. In contrast, today we can boast of a strong and stable financial condition of the state,” said Gogoi.

For Gogoi, who has been chanting the ‘development’ mantra since 2001 and promises to go by it in the third term, it will be interesting to see how he strikes a balance between fiscal deficit and expenditure. Even though experts don’t term the present outstanding debt of Assam as anything alarming, Gogoi needs to be prudent in his expenditures.

The Congress manifesto for the 2011 polls, however, allays fear of any financial crunch in the state. “Today, the state’s treasury operates smoothly throughout the year, while the state government did not require any overdraft from the apex bank since April 2005. Since 2005, there has not been any ban by the apex bank on government transactions.”

According to the Congress, the 13th Finance Commission rewarded the outgoing government with Rs 300 crore for “efficient fiscal management”.