Shillong, Sep 3: The Meghalaya state government has sought to allay concerns raised by the Comptroller and Auditor General (CAG) regarding the state’s potential descent into a debt trap, attributing the cautionary report to outdated figures.
Speaking to the media, Commission Secretary for Finance Vijay Kumar clarified the situation, stating, “The CAG’s comment on the possibility of a debt trap seems to stem from the 43 percent debt figure. However, our latest data shows that the actual figure is 36 percent, which is a significant 8 percent difference. With this correction, the idea of a debt trap is unfounded. We are, in fact, on a clear path to fiscal consolidation.”
Kumar also addressed the discrepancies noted by the CAG regarding the state’s budgetary practices. He explained that the difference between budgeted and actual expenditure is a common occurrence, particularly in smaller states that rely heavily on Central Government schemes. “For instance, our budget last year was ₹27,000 crores, but the actual expenditure was ₹21,800 crores, leaving a gap of ₹5,000 crores,” he said.
Kumar elaborated on the reasons behind this gap: “The CAG expects a tightly bound budget, meaning if we announce a budget of ₹25,000 crores, we should aim to spend the same amount. However, in states like ours, which are dependent on Central Sponsored Schemes (CSS), we often have to overestimate our budgets. For example, under the Sarva Shiksha Abhiyan (SSA), we may budget for ₹600-800 crores, but only receive ₹400 crores. This kind of over-budgeting is more of a procedural issue rather than a sign of fiscal mismanagement.”
He highlighted the challenges smaller states face due to their dependency on funds from the Government of India. “Larger states don’t rely as much on central schemes, so their budgets are more precise. For us, budgeting is a bit of a guessing game, especially when it comes to CSS. For instance, last year, we budgeted ₹1,000 crores for the Pradhan Mantri Awas Yojana (PMAY) but received ₹1,700 crores, which required us to adjust the budget provisions later.”
Kumar reassured that the state is making strides in closing the gap between budgeted and actual expenditures. “Years ago, the gap was much larger. We are now slowly narrowing it. However, the reality is that when the Government of India announces its budget on February 1st, we base our state budget on those numbers. The final allocations from the Centre, however, are often delayed by several months, leading to some slack in our budgeting process,” he added.
In conclusion, Kumar emphasized that while there are procedural challenges in the state’s budget-making process, the government remains committed to fiscal discipline. “The situation is under control, and we are taking all necessary steps to ensure that Meghalaya’s finances remain stable and sustainable,” he affirmed.