Facing fund crunch over COVID-19, Assam govt goes on austerity drive

Assam government announced several austerity measures on Wednesday including restriction on functions in five-star hotels, purchase of vehicles, and executive class air travel, in order to tackle the impact of COVID-19 lockdown on the state's economy.

The state finance minister Himanta Biswa Sarma said unlike decisions to cut salaries of government employees in Maharastra, Telangana, Rajasthan, or Odisha, Assam decided to pay full salary to its employees for April. "Normally we release the salaries on the first day of every month. But April month's salaries will be paid on May 8," he told reporters.

The state requires Rs. 3,600 crore every month to pay salaries, pensions, and interest against loans.

Sarma said the state Cabinet on Tuesday decided that no department will be allowed to take up new schemes (except central or externally aided) without the approval of the finance department. "We will also not pay the reimbursement of taxes to the industrial units for the next four months. The purchase of new vehicles will not be allowed without the Chief Minister's approval. It was also decided not to organise any more seminars, workshops, fairs and no programmes in five-star hotels. Also except Chief Minister, Governor, Chief Justice and judges of Gauhati High Court and chief secretary, air travel in executive class will not be allowed at this juncture," Sarma said.

It was earlier decided to cut 30% salary of Chief Minister, Governor, ministers, and MLAs. The Cabinet on Tuesday decided to cut 25% salaries of chairman and vice-chairmen of various corporations and boards under the government. "It was also decided to keep the MLA local area development funds on hold till July," he said.

Sarma said Coronavirus pandemic and the lockdown had resulted in an 80% decrease in the state's GST and cess collection in April--from 932.36 crores in March to Rs. 193 crores.