Meghalaya seeks financial aid of over Rs 80,000 crore from Centre

Syllad | The Rising MeghalayaJune 4, 2019

SHILLONG: The Meghalaya Democratic Alliance (MDA) government today sought Rs 82,815 crore from the 15th Finance Commission.

The proposal was made during a meeting between the state government led by Chief Minister Conrad K Sangma and the 15th Finance Commission headed by Nand Kishore Singh here in the city on Tuesday.

The state government has also sought Rs 15,609 crore as grants-in-aid for intervention in critical sectors. It has also proposed Rs 2,469 crore as grants-in-aid for upgradation of standard administration, Rs 1,567 crore for local bodies including the three autonomous district councils (ADCs) and Rs 300 crore for SPSUs.

After the meeting, Chairman of the Fifteenth Finance Commission, NK Singh told reporters that the leadership of Meghalaya remain focus and committed to address some of the endemic weaknesses of the state’s economy and the strategy which they have outlined before the Finance Commission appears to be prima facie persuasive and eminently credible.

“…they can count on the FC to take a sympathetic view before we begin to finalize and affirm our recommendations towards the end of the year and it will be our endeavor to see that the government of Meghalaya is supported in the multiple endeavors to be able to have really great GDP growth which measure up to the expectations and can improve the quality of life of the people of Meghalaya,” Singh assured.

He said Meghalaya has a feeling that following the loss of revenue on account of the ban on coal and following the uncertainties of the Goods and Services Tax (GST), there are some important revenue issues which deserve the attention of the 15th Finance Commission.

He informed the government have according sought a much higher devolution by way of enhancing the revenue deficit grant that was made available to them in the last Finance Commission.

“We will look into all these on whether these are irreversible or… this cannot be mitigated over time and consider their request for additional revenue deficit grant looking at the fiscal based issues they may have, looking at some other detail data which they may have to furnish,” Singh said.

Stating that there are huge challenges but equally there are also enormous opportunities in the state, the chairman said by and large there was a reasonable period of time when there was enough fiscal space which Meghalaya had but it did not utilize that fiscal space by enhancing public outlays.

But further with the implementation of the 5th Pay Commission, the economy of Meghalaya has been somewhat straight, the fiscal deficit has gone up far beyond the Fiscal Responsibility and Budget Management (FRBM) target of 3 per cent.

Pointing out that the debt to the state’s GDP has gone above 30 percent, Singh however suggested that the state government have to devise a strategy which can bring about greater medium term macro-economic stability by bringing down both fiscal deficit and the debt trajectory which will be in line with what is happening in the rest of the country.

“The per capita of Meghalaya is significantly lower than some states similarly placed on several key indicators on the educational sector particularly on education outcome and so on are also areas where I think that more needs to be done. The recently health initiatives taken by the Meghalaya government we have to see what kind of outcome but there are some health parameters which further improvement is necessary,” he further asserted.

Singh, while stating that last year the state’s GDP grew at just about 11 percent but for a period from 2011 to 2018, the state’s GDP grew to 5-6 percent and said, “This is significantly below the normal GDP growth that India experienced and significantly lower than some of the other North East states has grown.”

“I think Meghalaya’s economy needs to grow well above the double digit number it has achieved last year at 10.5 percent growth of the state’s GDP but it needs to grow as significantly above this to be able to catch up on loss time and to improve its ratings not only in term of the human development index and many parameters on sustainability development goals but to be able to bring about growth multipliers so that its revenue stream can also be enhanced significantly and it becomes increasingly more self-reliance than being dependent on such high and sustainable percentage of central transfers for the economy of Meghalaya,” he stated.