The Comptroller and Auditor General of India’s State Finances Report 2024-25 has highlighted a sharp rise in Assam’s liabilities and borrowings over the last decade, placing the state among the highest debt-growing states in India.

What Does the Report Say?

• Between 2015-16 and 2024-25, the total liabilities of all Indian states increased by 190 %.
• Assam recorded a 341 % increase in total liabilities, the third-highest increase among all states.
• Only Sikkim and Telangana reported a higher rise in liabilities.

Key Findings for Assam

• Assam’s internal debt increased by 415 %, one of the highest increases in the country.
• Loans and advances received from the Central Government increased by 1,369 % during the period.
• Assam was among the states that recorded:
  • A higher fiscal deficit in 2024-25 compared to the previous year.
  • A revenue deficit, where expenditure exceeded revenue receipts.

Why is Rising Debt a Concern?

• Higher Interest Burden: Rising debt increases future repayment obligations and interest payments.
  • This can reduce funds available for development programmes.
• Pressure on Public Finances: Excessive borrowing may constrain expenditure on:

• Education, Healthcare, Infrastructure & Social welfare.

• Risk to Fiscal Sustainability: Persistent revenue deficits indicate that debt is financing current expenditure rather than capital creation.

Positive Perspective

• Borrowing is not always harmful if funds are invested in productive sectors such as:
  • Infrastructure, Industrial development, Power generation, Employment creation.
• Assam’s recent investments in: Semiconductor manufacturing, Road infrastructure, Industrial corridors., Logistics and connectivity projects may contribute to future economic growth and revenue generation.

What Does the Comptroller and Auditor General of India Do?

Comptroller and Auditor General of India

• It is a constitutional authority established under Article 148 of the Constitution of India.
• It audits the accounts of: Union Government, State Governments, Government-owned bodies.
• It acts as the guardian of public finances and ensures accountability in public expenditure.

Exam Hook: Key Takeaways

• Assam’s total liabilities increased by 341 per cent between 2015-16 and 2024-25.
• Internal debt increased by 415 per cent.
• Loans from the Central Government rose by 1,369 per cent.
• Assam recorded both fiscal deficit and revenue deficit in 2024-25.
• The Comptroller and Auditor General of India is a constitutional authority under Article 148.

Mains Question

What are the implications of rising state debt on fiscal sustainability and development expenditure? Discuss with reference to Indian states.

One-Line Wrap

The sharp rise in Assam’s liabilities highlights the importance of balancing developmental borrowing with fiscal prudence to ensure long-term economic sustainability and inclusive growth.