Plea In Gauhati High Court Raises Concerns Over Assam’s Growing Debt and Fiscal Health

A legal challenge and an urgent appeal to the judiciary have spotlighted allegations of systemic financial mismanagement and breaches of statutory debt limits in Assam.

The financial corridors of Dispur are under intense judicial scrutiny as the Gauhati High Court has formally sought a response from the Assam government regarding a Public Interest Litigation (PIL) that challenges the state’s current fiscal trajectory. Filed by Advocate Reetam Singh, the petition alleges consistent violations of the Assam Fiscal Responsibility and Budget Management (AFRBM) Act, 2005. The court, led by a division bench comprising Chief Justice Ashutosh Kumar and Justice Arun Dev Choudhury, is now examining claims that the state has bypassed essential mandates designed to ensure economic stability.

A Surge in Liabilities

The legal pressure is mounting alongside a separate, urgent appeal from Leader of the Opposition (LoP) Debabrata Saikia. In a detailed representation to the Chief Justice, Saikia has requested the court to take suo motu cognisance of what he describes as an unsustainable debt crisis. According to data cited in the communication, Assam’s outstanding liabilities have escalated to approximately Rs 1,84,463 crore as of July 2025. This represents a staggering increase of over 107% in just four years, pushing the debt-to-Gross State Domestic Product (GSDP) ratio to 25.2%—a figure that significantly exceeds the 15th Finance Commission’s recommended ceiling of 20%.

Allegations of Systematic Violations

At the heart of both the PIL and the opposition’s plea is the contention that the government has repeatedly failed to adhere to the AFRBM Act. The legislation mandates that the state maintain a fiscal deficit not exceeding 3% of its GSDP and work toward eliminating revenue deficits. However, the petitioner and the LoP argue that successive annual budgets have admitted to deviations, with deficits peaking at 6.5% in 2022-23. Critics argue that the reliance on "cosmetic accounting practices" and the misclassification of expenditures have masked the true extent of the financial strain, often at the expense of productive capital investment.

CAG Findings and Administrative Irregularities

The legal arguments are bolstered by a series of adverse observations from the Comptroller and Auditor General (CAG) of India. Reports covering the period from 2020-21 through 2024 highlight systemic issues, including the non-submission of Utilisation Certificates amounting to nearly Rs 38,000 crore and the underutilisation of allocated funds. Furthermore, the opposition has raised alarms regarding "off-budget borrowings" and financial decisions made by the state cabinet without adequate legislative scrutiny. These practices, the petitioners suggest, are not merely administrative lapses but potential infringements upon constitutional mandates, including those governing the state’s financial powers under Articles 202, 266, and 293.

The Broader Economic Outlook

The push for judicial intervention comes at a sensitive time for the state’s economy, as concerns grow over how high committed expenditures—such as salaries, pensions, and interest payments—are crowding out critical public spending on education and healthcare. With the Gauhati High Court now officially seized of the matter, the state government faces a pivotal moment to justify its fiscal strategy. As the proceedings unfold, the focus remains on whether the judiciary will mandate a return to strict fiscal discipline, a move that stakeholders argue is essential to protect the long-term economic welfare of the state’s citizens.