Staff Reporter
GUWAHATI: At the end of the financial year 2024-25, the outstanding liability of Assam rose to Rs 1,72,775.07 crore, registering an increase of Rs 25,874.23 crore from 2023-24 when the liability of the state was Rs 1,46,927.84 crore.
The 2024-25 report of the CAG (Comptroller and Auditor General of India) on state finance reflected these statistics on state liabilities. Parliamentary Affairs Minister Atul Bora tabled the CAG report on the Assam Assembly session on its third day today. The CAG said that using borrowed funds for repayment of interests on outstanding loans is not a healthy trend.
The CAG said, “Total liabilities of the state government typically constitute internal debt of the state (market loans, ways and means advances from RBI, special securities issued to the National Small Savings Fund and loans from financial institutions, etc.), loans and advances from the central government and public account liabilities. As seen, the rise of Rs 25,847.23 crore in outstanding total liabilities during 2024–25 from last year is mainly attributed to higher public debt, which grew by 18.88 percent from Rs 1,24,376.09 crore in 2023–24 to Rs 1,47,855.85 crore— on account of increased internal debt and loans from the Government of India. Total outstanding off-budget borrowings also rose from last year’s Rs 2,193.13 crore to Rs 2,639.20 crore this year, indicating continued use of contingent financing mechanisms. The liability-to-GSDP ratio increased from 25.81 per cent in 2023-24 to 26.84 per cent in 2024-25, suggesting moderate fiscal pressure while remaining within the limit fixed under the Assam FRBM Act.”
The report said, “At the end of 2024-25, internal debt constituted the predominant share of the liability portfolio at 74 per cent (Rs 1,27,718.02 crore), followed by public account liabilities at 13 per cent and loans from the Government of India at 11 per cent. Off-budget borrowings accounted for the remaining two per cent. Internal debt of the state government increased by Rs 60,703.95 crore (90.58 per cent) from Rs 67,014.07 crore in 2020-21 to Rs 1,27,718.02 crore in 2024-25. An amount of Rs 8,406.08 crore was also paid towards interest on internal debt during the year.”
On the utilisation of borrowed funds, the CAG said, “Borrowed funds should ideally be used to fund capital creation and developmental activities. Using borrowed funds for meeting current consumption and repayment of interest on outstanding loans is not a healthy trend.”
According to the CAG report, during 2024–25, total borrowings from the state amounted to Rs 30,673.01 crore, reflecting a rise of 10.45 percent compared to Rs 27,771.60 crore in 2023–24. Of this, Rs 7,193.25 crore (23.45 per cent) was utilised for repayment of earlier borrowings, Rs 26,404.20 crore (86.08 per cent) was applied towards capital expenditure, while net loans and advances reflected a negative outflow of Rs 874.73 crore, indicating recoveries exceeding disbursements. The total repayment of earlier borrowings and capital expenditure is above 100 per cent; it means that borrowings were not the sole financing source for these. It shows that the state, during the year, wasn’t solely dependent on borrowings for creating assets and reducing liabilities.