Assam To Borrow Rs 600 Crores To Fund Expenditure
GUWAHATI: At a time when the government is claiming that the financial position of Assam is good, despite being hit hard by the COVID-19 pandemic, the State government is readying itself to borrow Rs 600 crores from the open market to meet the capital requirement for different expenditures of the State.
The process for borrowing loans from different financial institutions has already been initiated.
In connection to that, the Finance Department of the State has issued a circular wherein it stated that the government of Assam has offered to sell dated securities for an amount of Rs 600 crores with a ten-year tenure by auction.
The auction will be conducted by the Reserve Bank of India (RBI) at its Mumbai office on September 28, 2021.
According to sources at the Finance Department, State Finance Minister Ajanta Neog and Chief Minister (CM) Himanta Biswa Sarma have discussed the matter and have ultimately decided to borrow the amount from the open market which will attract hefty interest rates to be paid in two installments in a year. The entire loan amount has to be returned within ten years.
It may be mentioned here that for the microfinance loan waiver scheme, Chief Minister Sarma has already signed an agreement with banks and microfinance institutions.
Just a month ago the State government had signed an agreement with the National Bank For Agriculture And Rural Development (NABARD) for securing a loan of Rs 2,500 crores.
After coming to power, the Assam government has made one of its biggest investments of Rs 2,000 crores in the Numaligarh Refinery Limited to pick up stakes.
The CM had also announced that cash proceeds of welfare schemes, like old age pension, Orunodoi scheme amounts will be deposited within the 10th day of every month.
But a string of borrowings by the State government within a short period indicates that the financial coffer is drying up.
The revenue collection of the Government has been hit by COVID-19 induced lockdown and the various cash-benefit schemes run by the ruling government are taking their toll on the cash coffers.
Assam is an investment-hungry state, but these kinds of borrowings from the open market highlights the fact that outside investments are not arriving in the desired manner.
We are now on Telegram! Follow us for latest updates