Assam scripts fiscal history, to fund salaries entirely from its own tax revenue by FY27

Assam Chief Minister Himanta Biswa Sarma on February 19  announced that the state will, for the first time in its history, be able to fully pay salaries and pensions from its own tax revenue by the 2026–27 financial year, without relying on central tax devolution.

Speaking during the Motion of Thanks on the Governor’s Address in the Assam Assembly, Sarma said the state is nearing financial self-reliance, even as central devolution has been shrinking in recent years. He noted that the 16th Finance Commission had decided that states’ share would be calculated based on their contribution to GDP, which has reduced Assam’s share to 3.25 per cent.

According to the Chief Minister, Assam’s tax devolution is expected to be nearly Rs 50,000 crore in 2026–27. “We will be able to give employees’ salaries and pensions completely through tax revenue. This is happening for the first time in 77 years that salary bills will be paid by our own tax revenue,” he said.

Sarma stated that Assam will require around Rs 48,000 crore annually to meet salary and pension obligations for serving and retired employees. In addition to tax devolution, the state’s own tax collection is projected to be around Rs 30,000 crore in the next financial year.

For FY 2026–27, the Union Budget has allocated Rs 49,725 crore towards tax devolution to Assam.

Highlighting the state’s economic growth trajectory, Sarma said Assam is on track to become a Rs 10 lakh crore economy by 2027–28, two years ahead of the original target. He added that the state has also set a longer-term goal of achieving a Rs 15 lakh crore economy by 2030.

The Chief Minister claimed that Assam’s economy grew by 29 per cent between 2021 and 2025, compared to West Bengal’s 45 per cent growth during the same period. He further said that Assam is currently the fastest-growing economy in the country, adding that the state’s per capita income is expected to rise to Rs 1,85,429 in 2025–26 from Rs 86,497 in 2020–21.

Sarma also expressed confidence that Assam would soon surpass West Bengal in per capita income, stating that the gap between the two states is narrowing steadily.