Meghalaya has turned into a revenue surplus State, from being a revenue deficit state during FY 2018-19 to 2020-21.
This is as per the State Finance Report of the Comptroller and Auditor General (CAG). An analysis of state of finances of the Government of Meghalaya, in terms of its total receipts and expenditure for the financial year (FY) 2021-22 shows that the revenue receipts increased by 19.51 per cent from Rs 9,273.48 crore in 2017-18 to Rs 14,274.14 crore in 2021-22 at an average compound annual growth rate of 11.39 per cent.
During 2021-22, the state’s own revenue contributed approximately 19.79 per cent of the Revenue Receipts, while Central Tax Transfers and Grants-in Aid together contributed 80.21 per cent, the report said.
The contribution of central tax transfers and grants in aid in the total revenue kitty of the State over the past five years between 2017-22 has ranged between 74.28 per cent to 80.41 per cent.
“Thus, while State’s own share of revenue has grown by about 20 per cent over the past five years, Central Tax Transfers and Grants-in-Aid continued to be the main source of revenue receipts for the State of Meghalaya, as for the other North-Eastern States,” the CAG said.
However, it recommended that the State Government needs to make sincere efforts to augment its own resources and reduce its over-dependence on Government of India funds.
It further said that the Revenue Expenditure during 2021-22 which was Rs 13,620.22 crore increased by 18.45 per cent compared to the previous year. This was due to increased interest payments, medical and public health expenditure, Family Welfare expenditure and assistance to Power sector.
Revenue expenditure as a proportion of total expenditure remained above 80 per cent indicating that lion’s share of Government spending was on current expenditure on payment of wages and salaries, pension, rent and rates and payment of interest on outstanding debt.
Revenue expenditure as percentage of revenue receipts was 95.42 per cent indicating that more than 95 per cent of revenue receipts went into financing revenue expenditure.
However, decrease in Revenue Expenditure as percentage of Revenue Receipts from 107.63 per cent in 2020-21 to 95.42 per cent in 2021-22 has improved the Fiscal Deficit gap from 7.79 per cent in 2020-21 to 5.71 per cent in 2021-22.
Capital outlay during 2021-22 was Rs 2,751.79 crore and increased by 58.69 per cent over the previous year. Capital Expenditure as a percentage of total expenditure has remained stagnant at 15 per cent over the period 2017-18 to 2021-22.
As on 31 March 2022, there were 124 incomplete projects which had over-shot their schedules by one to more than 10 years. The expenditure incurred on these 124 incomplete projects was Rs 796.15 crore.
The CAG recommended that the State Government should take corrective action for quick completion of incomplete projects in order to avoid time and cost overrun besides blockade of funds.
“Stringent actions should be taken against defaulting contractors in the form of levying penalty clauses and blacklisting of the contractors,” it observed.
The receipts in public account Rs 5,098.35 crore, exceeded the disbursements (Rs 4,948.45 crore) by Rs 149.90 crore during 2021-22.
As on 31 March 2022, the State Disaster Response Fund (SDRF) had an unutilised balance of Rs 152.03 crore. As the SDRF is an interest bearing Reserve Fund, the liability of interest payment rests with the State Government. Non-payment of interest amounting to Rs 0.28 crore resulted in overstatement of Revenue Surplus to that extent.
During 2021-22, the State Government issued guarantees of Rs 2,980.44 crore. However, the State Government did not receive any amount towards guarantee commission.
“Guarantee Commission works out to Rs 15.24 crore during 2021-22. The accumulated balance of outstanding Guarantee Commission Fee was Rs 79.19 crore as on 31 March 2022,” the report said.
The prevalence of Fiscal Deficit during 2017-22 indicated continued reliance of the State on borrowed funds, resulting in increased fiscal liabilities of the State over the period 2017-22. Fiscal liabilities increased by Rs 1,862.35 crore (13.67 per cent) during 2021-22 compared to previous year. The fiscal liabilities during 2021-22 stood at 40.92 per cent of the GSDP and exceeded the limit of total outstanding Debt-GSDP ratio target (28 per cent) fixed in the State FRBM Act, 2006.
Furthermore, the cash balances of the State Government at the end of the current year decreased by Rs 205.16 crore from Rs 162.49 crore in 2020-21 to (-) Rs 42.67 crore in 2021-22.
Cash Balance investment decreased from ₹ 81.10 crore in 2020-21 to Rs 16.87 crore in 2021‑22.
Meanwhile, the State achieved a growth rate of 8.96 per cent of Gross State Domestic Product (GSDP) during 2021-22, as compared to negative growth rate of 0.15 per cent during 2020-21.
According to the CAG, the GSDP growth rate indicated that the economy had achieved the growth levels of pre pandemic years during 2018-19 and 2019-20, after the downturn of 2020-21.
However, this increase was lower than that of national GDP, which is 19.51 per cent.
“This indicates that there is a need for further infusion of capital investment, especially in the services sector which is a major contributor to the GSDP,” the report said.
