GUWAHATI, June 29 ? The assets of the State Government grew by only 10.11 per cent during the 2000-2001 fiscal, while its liabilities, during the year, grew by 17.95 per cent, mainly due to the huge revenue deficit of Rs 779.48 crore. The ratio of assets to liabilities declined from 0.93 in 1999-2000 fiscal to 0.87 during 2000-2001, indicating reduced solvency of the State, said the report of the Comptroller and Auditor General (CAG) of India for the 2000-2001 fiscal of Assam Government (Civil). Though there was a decline in both revenue and fiscal deficit of the State Government during the year, compared to the previous year, there had been a continuous increase in indebtedness due to uncontrolled revenue expenditure and interest payment.
The revenue expenditure of the State Government during the year, accounted for 92 per cent of the total revenue and capital expenditure and it marked an increase by ten per cent as compared to the previous year. The rate of growth of non-plan component of revenue expenditure was 90 per cent, which far surpassed the 48 per cent growth rate of the plan expenditure. On the other hand, the interest payment of the Government increased from Rs 559.90 crore in 1996-97 to Rs 885.11 crore in 2000-2001, indicating an increase of 58 per cent. During the five year period between 1996-97 and 2000-2001, internal debt of the State had grown by 148 per cent, loans and advances from the Union Government by 33 per cent and other liabilities by 54 per cent.
However, during the year, very little of the borrowings were available for investment and other expenditure, entire loan received from the Government of India had to be used for repayment of loans and interest thereon, said the CAG report. Compared to the above, the share of capital expenditure in the total expenditure had increased to nine per cent in the year, against the eight per cent during the previous three years ending in 1999-2000. Modest revenue growth and galloping expenditure brought the State to the brink of fiscal collapse. Inadequate cash balances of the State Government with the RBI necessiated taking of ways and means advances of Rs 1,054.60 crore and over draft of Rs 4,187.61 crore on 293 days during the year. The amounts of ways and means advances and over drafts outstanding at the end of 2000-2001 were Rs 175.72 crore and Rs 500.87 crore respectively. The huge ways and means advances and over drafts indicated deteriorating cash management, the report said.
Analysis of financial data of the Government showed increase in non-plan revenue expenditure and huge revenue deficit compelled the Government to apply borrowed funds for servicing of debt and meeting revenue expenditure with little left for investment. To escape from the financial stress, the State Government preferred the costlier option of borrowing than to increase the tax revenue, said the report. About the State Government-run companies and corporations? The report said that as on March 31, 2001, twenty four Government companies and corporations, in which the State Government had invested Rs 357.12 crore, were running under loss with accumulated losses of Rs 163.58 crore upto March 2000.
Even the companies, which were making profit, were giving only a marginal return on investment ranging from 0.005 per cent to 0.15 per cent. Thus, while the Government was raising high-cost borrowings (8.75 to 14 per cent) from the market, its investments in Government companies etc. fetched insignificant returns, the report said. Moreover, the report observed, the contingent liabilities of the State Government in the form of guarantee offered to financial institutions amounting to Rs 1,943.55 crore.