Assam Cuts Costs to Combat COVID-19, Issues Austerity Measures

Guwahati, April 29, 2020:

The Assam Government on Wednesday issued a set of austerity measures to deal with the economic crisis resulting from the ongoing nationwide lockdown following the outbreak of coronavirus.

According to the statement issued by the Finance Department of the State Government, there is a need to rationalize expenditure and optimize available resources, and therefore, it has decided to ban functions at five-star hotels as well as on purchase of vehicles along with a few more measures.

“Purchase of vehicles is banned until further orders, except in case of ambulances and vehicles required for police duty,” read the statement, adding that purchase of ambulances and police duty service vehicles would be permitted with the approval of Assam Chief Minister Sarbananda Sonowal.

Similarly, the State Government has banned holding exhibitions/seminars/conferences/fair and functions in the first quarter. “There will be a ban on holding of meetings and conferences in five star hotels,” read the statement.

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Assam has withdrawn all the sanctioning power delegated to the Administrative Departments relating to the issuance of Administrative Approval and Financial Sanction in respect of State-Owned Priority Development (SOPD) schemes until further orders.

However, the Heads of Administrative departments will continue their delegated power with respect to Centrally Sponsored Schemes (CSS) and Externally Aided Project (EAP).

Earlier, the State Finance Department had limited the Establishment Expenditure for the first quarter of Financial Year (FY) 2020-21 to 20%. This has been reduced to 10%. “Now only 10% of the total budget is hereby allowed to be spent,” stated the release.

“All expenses pertaining to industrial exemptions, subsidies and incentives of various sectors are hereby suspended until further orders. No reimbursement of GST (Goods & Services Tax) to industries will be allowed in the first quarter of the current financial year,” it further stated.

Assam is cutting on its expenditures to aid its economic recovery following the Covid-19.

Finance Minister Himanta Biswa Sarma informed that the GST collections for April 2019 stood at Rs 932 crore, but in April, 2020, it was just Rs 193 crore, thereby indicating at the drop of 80%. The revenue collection from the sale of liquor also dropped to Rs 6 crore this month from Rs 65 crore in March.

Keeping the reeling economy in the state, the Government has decided that no executive class would be allowed except Governor, Chief Minister, Chief Secretary and Chief Justice and other Judges of the Gauhati High Court of Assam.

Assam has also suspended the release of MLA Area Development Funds for the first four months of the current fiscal. It has reduced the remuneration in respect of Chairman and Vice Chairman of all Public Sector Units (PSUs)/Corporations/Boards to 25% with effect from May 1st.

Additionally, “no officer will be allowed to attend any foreign training course/workshop/seminar outside India for which expenditure has to be borne by the State Government.”

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