Meghalaya is in deep financial crisis due to shortfall in the receipt of its share of central taxes.
The State’s shortfall in the receipt of its share of central taxes between April and October is Rs 726 crore, roughly 25 per cent of the estimated amount it should have been allotted.
This was informed by State Chief Secretary M S Rao here today. He also said that this shortfall is huge for a small state like Meghalaya.
“We are more or less dependent on the share of central taxes since our own revenue is less,” Rao said.
Admitting that the financial position of the State is not the best, Rao said that Meghalaya is more or less dependent on the share of central taxes as its own revenue base is low.
According to Rao, the amount Meghalaya received from the Centre as share of central taxes in these seven months was Rs 2,273 crore, short of the Rs 3,000 crore that was estimated.
“We are hoping that in the last three months of the financial year the release of the share of central taxes will be better,” the Chief Secretary said.
Despite the State’s financial health not being rosy, Rao exuded confidence that the government would be able to pay salaries of its employees, though it may not be able to clear all the arrears in full.
It may be noted that pending arrears of the Fifth Meghalaya Pay Revision have not been paid to State government employees.
While 30 per cent and another 40 per cent of the revised arrears were released in 2017 and 2018, the remaining 30 per cent which was due to be released in 2019 has been kept pending till date.
Meghalaya is heavily dependent on central government tax revenue sources, in fact, up to 85 per cent. The State’s own tax revenue is -9.0 per cent while the non-tax revenue is -64 per cent.
Due to Covid-19 pandemic and the downturn in the economy, states in the country are receiving 30-35 per cent less from their share of central taxes kitty. Meghalaya has already lost about Rs 400 crore from its share of central taxes in the last six months.
In September and November this year, Chief Minister Conrad Sangma met Union Finance Minister Nirmala Sitharaman in New Delhi to seek her support for releasing the share of central taxes.
The shortfall of the State’s share of central taxes is going to have a severe impact on developmental spending in the State.
Interestingly, during the election campaign for the 2018 Assembly polls, the NPP had promised the people that it would ensure abundant funds from the Centre if it came to power.
However, two years have passed but the State is yet to see the promises turning into reality with many boards and corporations in the State not being able to pay the salary of their employees.