Economy will be in Danger if Lockdown Extends beyond 3 Months: Assam Finance Minister

Dispur, April 1, 2020:

Assam Health and Finance Minister Himanta Biswa Sarma, weighing in on the economic downturn caused by the complete halt of all activities, has opined that if this 'situation' continues beyond 3 months, it could spell doom for the economy of Assam.

Expressing his thoughts on the current downturn in a television interview, said that till June, the State is in a secure position as far as the economy is concerned. However, Sarma warned that the situation could turn grim if the lockdown extends beyond June. "If vaccine does not come out, if medicine does not come out., there could be a near lockdowm. People will not dare venture outside of their homes", Sarma said, and added that the people will have to live in perennial fear vaccine/medicine does not come out.

The Assam Minister said that Government employees have been informed that 20% of their salaries could be deducted. If that is the case, the Assam Minister said, all Ministers and MLAs will not be given any percentage of their salaries. Every month, salaries are released on the 1st of every month, and this coming month, the Assam administration will try to release salaries on April 8-9, as per the norms.

Sarma said that the Governments in the other states have already started making announcements to cut down the salaries . He pointed to Andhra Pradesh, where all barring Grade-IV Government employees will only be paid Rs 50%. In Maharashtra, Government employees will only get 50% of their salaries. Similar steps will also be taken by the Telangana Government.

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Even if the lockdown is not extended, offices will only see the participation of 30% work force and everything will be reduced. Biswa Sarma said that the 3 sources of the Government's revenue -- tax, royalty, and a income tax percentage from the Centre.

Sarma said that no taxes have been collected as the economy has been brought to its knees. The amount that the Assam Government gets -- to the tune of Rs 2,000 crore, will be reduced to less than Rs 200 crore.

The Minister said that the Government's main priority is to ensure that the health and other services needed to curtail the outbreak -- such as police and fire services -- continue to chug along despite the crisis over the coronavirus.

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Adding that the Government has spent 85,000 crores for developmental activities - an increase of 100% compared to 2016. The Assam Government is seeking answers from the Reserve Bank as to what amount remains in the coffer, and the RBI will inform them on April 7, along with the possibility of borrowings.

Addressing the poor in the State, Sarma said that the Assam Cabinet has decided to provide rice free of cost to 52 lakh families with ration cards amid the problems faced by the economy. Construction workers have also been given a sum of Rs 1,000 to help them tide over the crisis. Under the Indira Gandhi National Widow Pension Scheme, the widows will also be given given benefits. The poor families without cards will also be given Rs 1,000.

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