Off-budget borrowings of five NE states amount to Rs 4,062 crore in past 4 years

Staff Reporter

GUWAHATI: Five northeastern states, including Assam, resorted to off-budget borrowing amounting to Rs 4,062 crore in the past four financial years. Assam borrowed the highest amount of Rs 2,736 crore among the five states of the region during the period.

Statistics of the Department of Expenditure of the Union Finance Ministry have revealed this.

Off-budget borrowing is a method for a government to finance its expenditures by having public institutions, like public sector undertakings (PSUs) or special purpose vehicles (SPVs), raise funds from the market or financial institutions, with the government guaranteeing the loans. These borrowings are not reflected in the government's official budget or fiscal deficit calculations, effectively allowing the government to bypass spending and debt limits and avoid revealing the full extent of its financial liabilities.

According to the statistics, in 2021-22, Assam borrowed Rs 239 crore; Rs 853 crore in 2022-23; Rs 1,102 crore in 2023-24; and Rs 542 crore in 2024-25.

Following Assam in the region is Manipur with a borrowing of Rs 630 crore - Rs 293 crore in 2022-23, Rs 228 crore in 2023-24 and Rs 109 crore in 2024-25.

The off-budget borrowings of the other three states in the regions in the past four years are Rs 575 crore by Sikkim, Rs 82 crore by Meghalaya, and Rs 39 crore by Nagaland.

According to the Department of Expenditure of the Ministry, all states have enacted their Fiscal Responsibility and Budget Management (FRBM) Act. Compliance with the State FRBM Act is monitored by the respective state legislatures. Instances of off-budget borrowings by certain state public sector companies, special purpose vehicles and other equivalent instruments, where principal and/or interest are to be serviced out of the state budgets, had come to the notice of the Ministry of Finance. Considering the effect of bypassing the net borrowing ceiling (NBC) of the states by such borrowings, it was decided and communicated to the states in March 2022 that borrowings by state public sector companies/corporations, special purpose vehicles and other equivalent instruments shall be considered as borrowings made by the state itself for the purpose of issuing the consent under Article 293(3) of the Constitution of India.

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