Assam Government Urges Banks to Boost Industrial Financing
Promoting Industrial Growth in Assam
Finance Minister Jayanta Mallabaruah (right) during a discussion at the conclave, in Mumbai. (AT Photo/special arrangement)
Guwahati, Sept 24: The Assam administration is advocating for increased involvement from banks in financing the broader industrial ecosystem, which encompasses MSMEs, vendors, transporters, component manufacturers, and service providers within the state.
During his address at the 13th SBI Banking & Economics Conclave held at The Taj Mahal Palace in Mumbai, Finance Minister Jayanta Mallabaruah stressed the importance of cash-flow-based lending for first-time entrepreneurs. He suggested that banks could utilize verified digital records such as GST data, digital transactions, Udyam registration, and invoices to evaluate businesses, rather than solely depending on traditional collateral.
“The Gross State Domestic Product (GSDP) of Assam at current prices is projected to be around Rs 7.42 lakh crore for the fiscal year 2025-26, with a real growth rate estimated at approximately 10.1 percent. The nominal GSDP for 2026-27 is anticipated to reach about Rs 8.71 lakh crore,” he stated.
Baruah mentioned that the government has proposed the establishment of a Rs 2,000-crore Assam Industrial Momentum Fund along with a High-Powered Industrial Promotion Board to enhance industrial development.
This fund is designed to support investments pledged under the Advantage Assam 2.0 initiative.
Additionally, targeted support has been suggested for sectors such as electronics and semiconductors, logistics and warehousing, aerospace and defense, as well as start-ups.
“An Electronics City and Electronics Manufacturing Cluster is currently being developed in Jagiroad,” he added.
He also noted that the state's credit-deposit ratio has improved from 41.10 percent in March 2016 to 73.52 percent in March 2026, with cumulative priority-sector advances surpassing Rs 3.69 lakh crore since 2021-22.
“For the fiscal year 2026-27, revenue receipts are projected at around Rs 1.19 lakh crore, which includes Rs 42,449 crore from the state's own resources and Rs 36,000 crore in own-tax revenue,” he explained.
The budget documents indicate total revenue receipts at Rs 1,18,562 crore, with Rs 42,449 crore sourced from the state's own resources.
According to the minister, Assam's share in tax devolution has risen from 3.128 percent under the 15th Finance Commission to 3.258 percent under the 16th Finance Commission for the period 2026-31. The Union Budget for 2026-27 allocates approximately Rs 49,725 crore in tax devolution to Assam.
Assam has set a fiscal deficit target of around Rs 26,186 crore, which is equivalent to 3 percent of the GSDP, while outstanding liabilities are estimated to be about 24 percent of the GSDP, as stated by Mallabaruah.
He also highlighted the state's advancements in road, rail, air, and waterway connectivity, including the Brahmaputra and National Waterway-2, asserting that Assam could become a key production and logistics hub for the Northeast and facilitate India's engagement with neighboring economies.
“Assam is currently experiencing economic momentum, a growing investment pipeline, enhanced infrastructure, and a more robust institutional credit environment. Most importantly, we have our people, our human resources, who must ultimately become the primary beneficiaries and catalysts of this transformation,” he remarked.
He emphasized that the state's industrial growth should translate into job and business opportunities for the youth.
“Our children should have the opportunity to work and earn in their home state rather than having to migrate to Bengaluru for employment,” Baruah concluded.