All’s Not Well With Assam’s Fiscal Health; CAG Proposes Remedial Measures

Staff Reporter

GUWAHATI: All is not well in the Assam fiscal health. The CAG (Comptroller and Auditor General) of India recommended some remedial measures.

The CAG report said that the state government may take necessary steps to reduce the fiscal deficit, institute a monitoring mechanism, and strengthen its internal control mechanism.

The report said that ‘as per the debt sustainability analysis, the outstanding debt of the Government of Assam has grown on average at the rate of 20.67 per cent annually during the period from 2019-20 to 2023-24. The debt-GSDP ratio of the state has increased from 20.83 per cent in 2019-20 to 25.77 per cent in 2023-24, which indicates that debt stabilisation may not be possible in the near future.

The report further said that the mismatch between receipt and expenditure indicates a continuation of fiscal stress. The report said that the government committed an inflexible expenditure as the percentage of revenue expenditure decreased from 73.46 per cent in 2019-20 to 69.92 per cent in 2023-24. The downward trend on committed and inflexible expenditure leaves the government with more flexibility for other priority sectors and capital creation.

The overall budget reliability assessment indicates there were large deviations between actual expenditure and the original budget as well as between the actual expenditure and the final budget in several grants. Moreover, it is also noticed that in several cases there were supplementary grants where expenditure was not even up to the original grants, the report said, adding, “A reliable budget practice is needed to deal with such deviations.”

The report said that despite the requirement of submitting utilization certificates (UCs) against conditional grants within the stipulated time, 6335 UCs worth Rs 18,669 crore were pending for submission as of March 31, 2024. In the absence of UCs, it could not be ascertained whether the recipients had utilised the grants for the purposes for which those were given.  

In view of increasing public debt, the report suggested that the state government may make efforts to augment its revenues and manage its revenue expenditure efficiently so as to avoid pressure on repayment of public debt and interest liabilities in forthcoming years. The state government may formulate a realistic budget based on reliable assumptions of likely resource mobilisations, the assessed needs of the departments and their capacity to utilise the allocated resources so as to avoid inflated budgeting without corresponding to available resources. 

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