Guwahati, Feb. 18: Unable to resist the lure of a Rs 2,000-crore loan from the Asian Development Bank (ADB), the cash-strapped Assam government has finally drafted a memorandum of understanding with the Centre on fiscal reforms. Highly-placed sources in the finance department told The Telegraph that the MoU, including a commitment to reduce the size of the workforce, would be signed after the state Cabinet approved it.
Dispur is under pressure from Delhi to sign the MoU as early as this month. The rewards are a special financial package of Rs 750 crore from the Centre and the huge ADB loan, which the state government plans to utilise in improving the power sector and public resource management.
However, signing the MoU will leave the state government no option but to carry out harsher fiscal reforms than those adopted by the erstwhile AGP-led government after signing a similar agreement with the Centre.
The steps that the state government will have to commit itself to include downsizing the workforce, revocation of certain perks, a freeze on recruitment and withdrawal of government assistance to loss-making public sector units.
Several such steps for the power sector have been suggested in the draft MoU. These include “unbundling” of the Assam State Electricity Board.
Chief minister Tarun Gogoi and the AICC observer for Assam, Mohsina Kidwai, had linked the expansion of the ministry on June 7 last year to the expected loan from ADB. Both had argued that the workload on ministers with multiple portfolios would increase after the disbursal of the loan.