Infra push meets fiscal reality in Assam ahead of Assembly elections

Development, fiscal stress and identity issues dominate Assam polls, as parties battle over growth claims and governance ahead of elections

As Assam heads towards Assembly elections — the first since the 2023 delimitation exercise — both sides, the ruling National Democratic Alliance (NDA) led by the Bharatiya Janata Party (BJP) and the Congress-led Asom Sonmilito Morcha, are centring their campaign rhetoric on critical issues such as infiltration, evictions, and development projects. Questions around development spending and the state’s fiscal position are also gaining prominence. 

Assam remains the dominant political force in Northeast India, accounting for 68 per cent of the region’s 45 million inhabitants.

The interim Budget for FY27, tabled on February 17, focused on agricultural and rural development schemes, the promotion of cash crop diversification, and significant capital investments in roads, railways, and industrial corridors. 

Across the eight Northeastern states, the own tax revenue-to-gross state domestic product (GSDP) ratio remains modest, fluctuating between 2 per cent and 6 per cent. Meghalaya leads the region with a ratio of 6.3 per cent for FY26 Budget estimates (BE), while Assam ranks second at 4.7 per cent. 

While the state’s economic narrative shows progress, with poverty levels declining drastically, fiscal concerns persist. Assam’s debt-to-GSDP ratio has climbed steadily, rising from 17.3 per cent in FY17 to a projected 27.8 per cent in FY26 (BE). 

Assam’s real GSDP growth has consistently kept pace with India’s national real GDP. The state’s real GSDP rose from 5.7 per cent in FY17 to a peak of 12.3 per cent in FY23; however, it subsequently experienced a gradual decline to 7.8 per cent by FY25. On the comparable 2011-12 series, India’s real GDP growth, on the other hand, increased from 8.3 per cent in FY17 to 9.7 per cent in FY22, before marginally declining to 6.5 per cent in FY25. 

For FY26 (BE), Assam’s projected revenue expenditure is ₹1.17 trillion, with the fiscal deficit pegged at ₹27,300 crore (around 3.7 per cent of GSDP). Under the current BJP-led administration, Assam has achieved a revenue surplus only twice, in FY19 and FY21. The fiscal deficit as a share of GSDP stood at 3.66 per cent in FY24, slightly exceeding the 3.5 per cent limit mandated by the Fiscal Responsibility and Budget Management framework. 

Notably, the state has maintained a robust capital outlay, which has ranged between 1.7 per cent and 3.8 per cent of GSDP from FY12 through FY24. To further bolster infrastructure, the government is prioritising a landmark ₹18,600 crore underwater road-cum-rail tunnel beneath the Brahmaputra. This project is expected to significantly reduce daily travel times and improve regional connectivity. 

According to a recent statement from the Union Ministry of Finance, ₹49,725 crore has been budgeted for Assam under tax devolution for the upcoming cycle, while ₹29,548 crore was provided as grants-in-aid during FY26. The state’s financial transparency has come under scrutiny following the Comptroller and Auditor General’s (CAG) State Finances Audit Report for 2023-24, tabled in November 2025. The report suggests that Assam’s actual fiscal health is more precarious than officially reported due to significant accounting misclassifications. Specifically, the revenue deficit was understated by ₹6,559.74 crore; the corrected deficit stands at ₹9,188.15 crore rather than the reported ₹2,628.41 crore. Similarly, the fiscal deficit was understated by ₹815.62 crore, bringing the actual figure to ₹21,670.31 crore. 

“Seeking supplementary grants without a requirement is indicative of poor budgetary management by the state government. Further, it is also clear that there is an absence of allocative efficiency and utilisation efficiency by departments, which led to excess expenditure in some grants and savings in others,” the report added. 

Women’s welfare and educational empowerment have emerged as a central pillar for the 2026 elections, with the current government promising to double down on flagship programmes such as the Orunodoi Scheme for direct cash transfers and Mukhya Mantri Nijut Moina, which provides financial incentives to girl students to prevent child marriage. 

Chief Minister Himanta Biswa Sarma has promised to provide around 200,000 jobs to people in Assam. However, data from the Periodic Labour Force Survey (PLFS) reveal a volatile labour market: Assam’s unemployment rate dropped from 7.9 per cent in FY18 to a low of 1.7 per cent in FY23, only to climb back to 3.9 per cent in FY24, contrasting with the more gradual national decline. 

These policy interventions align with a literacy landscape where Assam’s female literacy rate of 75 per cent notably outperforms the national average of 71 per cent, according to NFHS (2019-21) data. However, this progress is relative. Despite surpassing the all-India average, Assam still ranks seventh in overall literacy among the eight Northeastern states, trailing behind high performers such as Mizoram, Nagaland, and Meghalaya.

 

This election cycle is also notable for its streamlined format and reduced participation. For the first time in 25 years, voting will take place in a single phase. Furthermore, the candidate pool has shrunk to its lowest level in 48 years, with only 722 candidates contesting across 126 seats, a sharp decrease from 946 in 2021 and 1,064 in 2016.

 

Despite economic growth, the state continues to grapple with multifaceted challenges. These include recurring seasonal floods, complex issues surrounding identity and immigration -- compounded by the Special Intensive Revision exercise -- and lingering instances of localised militancy and insurgency.