Assam’s revenue share far short of need, says Mahanta

Complaining that the recommendations of the Finance Commission were much below the expectations of the Assam government, Mahanta said that while his government had projected its non-plan revenue deficit for 2000-01 to 2004-05 at Rs 36,000 crore, the Commission had calculated it only at Rs 9,387 crore.

“What a state like Assam needs today is a big push to break away from the vicious circle of backwardness and to carry out fiscal reforms. But if the recommendations of the Finance Commission are to be accepted, the entire energy of the state government will be sapped in just maintaining day-to-day existence,” the Chief Minister said.

Assam, he said, was in need of liberal assistance from the Centre “but the Eleventh Finance Commission has simply failed to address the genuine requirements of my state,” he complained.

He pointed out that several factors like infiltration from Bangladesh, insurgency, recurring floods etc had contributed towards low growth of the state’s economy, with successive governments having to introduce employment-oriented initiatives to check the trend of frustrated youths taking to militancy.

“But all these steps have made the coffers of the state empty and Assam has landed in a hopeless situation in the face of a chronic financial crunch,” he added.

Giving a detailed account of the financial position of the state, he said that even if the state government refused to pay Central scales to its employees as per their demand, a substantial amount would be needed to pay salaries that were revised since January 1996.

The projections made by the state government have shown that an amount of Rs 2010 crore will be required per month to meet the salary bills of its employees in the year 2004-05. “But the Finance Commission has failed to take this factor into account while calculating the state’s non-plan expenditures,” Mahanta said.

“As the awards of the Eleventh Finance Commission are grossly inadequate, Assam looks up to the Centre to tide over the present crisis,” the Assam Chief Minister, whose letter to the Prime Minister runs into eight pages, added.

Requesting the Prime Minister to provide Assam a debt burden relief on all loans availed prior to 1991 (when Assam was declared a special category state), Mahanta also demanded a moratorium with interest holiday for five years up to 2004-05 on all existing loans. This was required in view of the huge expenditure incurred in combating insurgency, he added.