Guwahati: Chief Minister of Assam Himanta Biswa Sarma said on Wednesday that the state will borrow nearly 11,000 crore rupees in the near future to implement various projects, while the state’s gross domestic product (GSDP) is expected to increase by 12.5% in 2021-2022 .
Responding to a heated discussion in the assembly on increasing the state’s debt, Sarma said Assam’s borrowing is within limits and the debt-to-GDP ratio is 22%, which is the lowest in the country.
Despite criticism from Congress, AIUDF, CPI (M) and Raijor Dal, he said the state plans to raise more debt in the near future to implement capital spending plans.
The Chief Minister said: “We have already negotiated a loan of 5,000 crore rupees to build 1,900 bridges over our rivers. To add super specialty blocks in each medical school in the state, we will borrow another Rs 3,000 crore.
“To build and modernize the district hospitals where there is no medical school, we will take a debt of 2,500 crore rupees. To build a road from Sivasagar to Charaideo, we will borrow Rs 250 crore. We are also discussing with the ADB to contract loans for four embankments. “
He said the total borrowing during 2021-2022 will be Rs 14,000 crore against the meeting’s sign of Rs 16,000 crore and Rs 7,500 crore has been increased so far during this fiscal year. The state will also reimburse Rs 2,500 crore this year.
“Next year we plan to borrow Rs 18,000 crore and Rs 22,000 crore the following year. Until last year, the debt-to-GDP ratio was 19% and it will be around 22% in this fiscal year. It is the lowest in the country. We expect the GSDP to reach Rs.415,000 crore this year, ”he added.
Sarma claimed that the debt-to-GDP ratio in opposition-ruled states is very high ”.
The ratio is 33% in Rajasthan, 35% in West Bengal and 52.5% in Punjab, the chief minister said.
“Kerala is a leftist state and has taken out the largest loan. Kerala’s finance minister asked me to borrow up to 4.5% of MSRP. Kerala’s debt to GDP ratio is 55%, but we see it as a model state. The health sector in this state is a model and we are all following it, ”he added.
The chief minister criticized the opposition for questioning the government over its debt management and said the House unanimously authorized the government to borrow up to 3.5 percent of the GSDP from the ‘Assam.
“So why are you asking us now about the possibility of taking out loans?” We are well within this limit. Our state’s GDP has grown very rapidly over the past three years and this year we will likely grow by 12.5% despite the impact of COVID-19, ”he added.
Sarma said Assam will spend around Rs 96,000-1,000,000 crore in 2021-2022 and that only Rs 14,000 crore of that amount will be in debt.
“We are in debt because our assets are increasing. We boldly pay back our default-free loans for a day. We are comfortable with our loans and our tax / GDP ratio is also stable, ”he added.
The chief minister said Assam will have to go into debt if it is to make progress and in order to get loans the state needs permission from the Center, the state assembly and the RBI.
“I think it’s a deliberate conspiracy to talk about loans to make Assam back down. But as long as I’m there and the BJP is in government, we’ll take loans and develop the state, ”he added.
The Chief Minister informed the House that Assam’s current debt stands at Rs 84,000 crore, while it is Rs 5.35,000 crore in West Bengal, Rs 2.74,000 crore in Kerala and Rs 2.82,000 crore in Punjab.
“That there be a five-member House committee to visit different states like Karnataka and Kerala. Let the team meet the finance ministers of these states and ask them why they have contracted so much debt, ”he told the president.
At the request of independent MP Akhil Gogoi, Sarma said he would present a “white paper” on state debt and finances at the next session of the assembly.
“Today is a historic day. Assam CM has helplessly accepted that the state should operate on loans. The per capita income of Assam is Rs 60,600, while that of Goa is over Rs 3,000,000. Assam’s position among the 33 states is at 27, ”Gogoi said, citing strong reactions from ruling MPs.
Manoranjan Talukdar of CPI (M) said that Kerala, Maharashtra and Punjab, which have borrowed huge sums of money, are strong states and created infrastructure, which is not seen in the ‘Assam.
Finance Minister Ajanta Neog said Assam witnessed the highest tax collection in its history from 2015-16 to 2019-2020 and GST collection increased by 40% in during the second wave of the COVID-19 pandemic.
Previously, Congressman Kamalakhya Dey Purkayastha criticized the government for “destroying” all state assets, prompting vehement protests from the Treasury bench.
“There is only revenue spending and nothing on the CAPEX front. There is no money in the MLA fund and development has stopped. Nowadays, politics is played on language and religion, ”he added.
Aminul Islam of the AIUDF said the state economy was on “oxygen support”.
Positive progress in border dispute talks, likely solutions soon: CM Assam and Meghalaya