Assam Assembly passes Bill enabling Government to raise borrowing limit

Guwahati, Aug 10
The Assam Assembly on Monday passed a bill that will enable the government to raise the borrowing ceiling by 0.50 per cent of the state’s GSDP even as the opposition Congress stressed that the additional funds should be utilized only for capital expenditure and not on any luxurious’ activity.
The Bill was passed by voice vote after Congress refused to withdraw its proposed amendment to it.
Moving the amendment to cap the net borrowing ceiling at 3 per cent of the projected Gross State Domestic Product for the current fiscal, senior Congress MLA Bharat Chandra Narah said the government should be careful about where the additional funds are spent.
State Finance Minister Ajanta Neog had on July 12 introduced the Assam Fiscal Responsibility and Budget Management (Amendment) Bill, 2021, in the Assembly.
She had said the Union Finance Ministry informed Assam that during 2021-22, the state will be allowed the Net Borrowing Ceiling (NBC) of four per cent of the projected GSDP for the fiscal. Narah, however, criticised the BJP-led government, which has been in power in the state since 2016, for reportedly hiring special flights for the chief minister and the finance minister of the state to fly to New Delhi.
Tarun Gogoi (of the Congress) was chief minister for 15 years before the BJP came to power here. He never took chartered flights to New Delhi.
Government meetings are held in five-star hotels. Priests from Uttar Pradesh are flown for festivals. It should curtail such extravagant expenses, Narah said.
AIUDF legislator Aminul Islam moved a similar amendment and said the government should be aware of its repayment capacity before going for more borrowings.
Responding to the opposition MLAs, Finance Minister Ajanta Neog said, Through this Bill, we are only trying to utilise the additional (borrowing) space given to us by the Centre.
She also pointed out that there are provisions of checks and balances in the Bill for the state government to avail the additional funds.
We want to keep this provision as we may need more funds to tide over situations like the COVID-19 pandemic, Neog said.
Another Congress legislator Sherman Ali Ahmed asked for assurance from the government that the additional money will be used exclusively to meet capital expenditure requirements and not for revenue expenses. Supporting Ahmed, Narah questioned who will monitor that the funds would not be spent on luxurious activities’ and refused to withdraw the amendment brought by the Congress.
The AIUDF, however, withdrew its amendment and the Bill was later passed by voice vote.
At the beginning of the financial year 2020-21, the state was allowed borrowing permission based on 3.50 per cent of GSDP. The remaining borrowing ceiling of 0.50 per cent of GSDP is earmarked for incremental capital expenditure by the state.
Additional borrowing ceiling of 0.50 per cent of GSDP over and above the ceiling of 4 per cent of GSDP will also be allowed to the state, based on guidelines issued by the Centre, subject to the amendment of the Act, Neog had said.
The decision to raise the borrowing limit has been taken to strengthen resources of the state to fight the COVID-19 pandemic as well as maintain the standards of service delivery to the public, she had said. PTI