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regular-article-logo Wednesday, 06 August 2025

Saikia letter flags Assam debt crisis, seeks HC probe into fiscal law violations

In an 11-page representation addressed to Chief Justice Ashutosh Kumar, Saikia cited state budget figures, court cases, CAG reports and freebie schemes to support his claim

Umanand Jaiswal Published 06.08.25, 07:46 AM
Debabrata Saikia

Debabrata Saikia File picture

Leader of the Opposition in the Assam Assembly, Debabrata Saikia, has written to the Gauhati High Court urging it to take suo motu cognisance of alleged “persistent and systemic violations” of the Assam Fiscal Responsibility and Budget Management (AFRBM) Act, 2005, and related constitutional mandates by the BJP-led government.

In an 11-page representation addressed to Chief Justice Ashutosh Kumar, Saikia cited state budget figures, court cases, CAG reports and freebie schemes to support his claim. He alleged that violations explicitly acknowledged in Assam’s own budget reports have led to an unsustainable state debt crisis, which stood at 1,84,463 crore as of July 2025, with a debt-to-GSDP ratio of 25.2 per cent.

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Saikia requested the court to direct the Comptroller and Auditor General (CAG) to conduct a time-bound audit — within three months — on the government’s compliance with the AFRBM Act and to issue an interim stay on the announcement and implementation of new freebie or cash transfer schemes not part of the Annual Budget, particularly ahead of the 2026 state elections, to prevent further fiscal strain and electoral misuse.

He contended that the rising debt threatens economic stability, public welfare and the constitutional rights of Assam’s citizens, necessitating urgent judicial intervention under Article 226 of the Constitution.

“These admissions, corroborated by adverse findings from the CAG, RBI and PRS India, reveal a pattern of fiscal mismanagement, including understatement of deficits, misclassification of expenditures, underutilisation of funds, and dependence on high-cost cash transfers,” he stated.

The AFRBM Act mandates a fiscal deficit below three per cent of GSDP (with some flexibility up to 3.5 per cent) and a revenue surplus. However, Saikia said Assam has “consistently breached” these targets, citing fiscal deficit figures ranging from 4.29 per cent in 2019–20 to 3.88 per cent in 2024–25.

He claimed these violations are compounded by systemic irregularities flagged in successive CAG reports, which point to possible fraud and corruption. He warned that increasing debt, high committed expenditure, and reduced fiscal space were fuelling inflation and eroding Article 21’s guarantee of a dignified life.

The annual growth rate of Assam’s outstanding liabilities was 23.32 per cent in 2022–23, vastly outpacing the GSDP growth of 12.27 per cent, he said — indicating unsustainable borrowing.

Saikia also pointed to seven post-budget freebie schemes involving cash transfers for 2025–26, declared without cost-benefit analysis or vote-on-account approval. He alleged these were being used to “electorally induce” voters at the expense of the state exchequer.

The Opposition has repeatedly raised fiscal mismanagement concerns in the Assembly and staged walkouts, which he said reflected the government’s failure to engage with accountability.

In his plea, Saikia urged the Court to issue a notice to the state government to explain its non-compliance with AFRBM targets and to direct it to submit within 90 days a detailed report on all cash transfer and freebie schemes, including beneficiaries, costs, and impacts. He also sought the constitution of an expert committee — including a retired judge, senior bureaucrats, finance professionals, and the Leader of the Opposition — to recommend corrective measures within a year.

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