Assam’s debt burden to rise further as state plans fresh loans

Assam’s financial liabilities are set to increase significantly as the state government prepares to take another round of loans, continuing a trend of rising borrowings in recent years.

According to official plans, the state government will borrow ₹1,000 crore on January 13, repeating a pattern seen earlier when it took ₹1,000 crore just a week prior. Finance officials have submitted a loan proposal to the Reserve Bank of India (RBI) as part of this borrowing plan. This follows a sequence of recent loans, including the government taking ₹1,000 crore just four days ago and ₹1,900 crore in December. By February, additional borrowings of ₹3,000 crore are also expected. Over the past nine years, projections suggest the state’s total debt could rise to nearly ₹2 lakh crore.

The recent round of borrowing adds to a long-term upward trend in Assam’s fiscal liabilities. Data from the Comptroller and Auditor General (CAG) of India shows that the state’s outstanding debt surged by over 103% between 2019–20 and 2023–24, rising from around ₹72,256 crore to ₹1,46,927 crore. Over the same period, the debt-to-GSDP ratio climbed from 20.83% to about 25.77%, reflecting increasing reliance on market and off-budget borrowings. Fiscal auditors have warned that growing debt levels could pose future repayment pressures if revenue growth does not keep pace with borrowings.

Earlier reports from the state government indicated that total outstanding liabilities were over ₹1.15 lakh crore, with officials asserting that the debt-to-GSDP ratio remained within prescribed fiscal limits and that borrowings had been used to accelerate infrastructure and development projects.

Economic analysis also shows that Assam’s per capita income and debt levels have both grown sharply in recent years. Per capita debt reportedly increased by nearly 71% between March 2021 and March 2025, rising from around ₹24,779 to ₹42,418, while per capita income also rose significantly in the same period.

Fiscal surveys highlight that Assam’s annual borrowings have increased by nearly 78% over three years, reflecting a sharp escalation in the state’s reliance on borrowed funds to finance expenditures.

While state officials have defended borrowing as necessary for development and infrastructure, critics and opposition parties have raised concerns about fiscal sustainability and the potential risks associated with increasing debt. Some have urged greater transparency and adherence to fiscal management norms to ensure that rising liabilities do not hinder economic stability in the long run.

As Assam continues to balance its development goals with fiscal pressures, the coming months will be crucial in shaping the state’s financial health and its ability to manage repayment obligations without compromising public services and investment.

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