Shillong, Sep 3: Meghalaya is set to achieve its $10-billion economy target by 2027-28, driven by a robust compound annual growth rate (CAGR) of 11.14% from 2019-20 to 2023-24. Commissioner & Secretary in-charge Finance, Dr. Vijay Kumar D, reaffirmed this on Tuesday, addressing concerns raised in the recent Comptroller and Auditor General (CAG) report.
Reacting to the CAG report, which highlighted several fiscal challenges, Dr. Kumar emphasized that the state’s economic trajectory remains strong despite these concerns. The CAG report pointed out that Meghalaya’s Gross State Domestic Product (GSDP) growth in 2021-22 and 2022-23 lagged behind the national GDP growth rates of 18.36% and 16.06%, respectively. Additionally, the fiscal deficit increased from 5.71% in 2021-22 to 6.55% in 2022-23, surpassing the target of 4% set under the Meghalaya Budget Management & Responsibility (Amendment) Act, 2022. The Deb
t-GSDP ratio also rose to 43.19% in 2022-23, exceeding the target of 28% prescribed by the Meghalaya FRBM Act.
However, Dr. Kumar explained that India’s accounting system is complex, with frequent data revisions by the Centre and varied methodologies used in fiscal calculations. He assured that the Finance Department would soon release a clarification to accurately depict the state’s fiscal parameters.
“The CAG’s report on GSDP was finalized before the release of the revised GSDP numbers by the Ministry of Statistics and Programme Implementation (MoSPI) in August 2024,” Dr. Kumar noted. He highlighted that the revised MoSPI figures show Meghalaya’s GSDP for 2021-22 and 2022-23 as ₹40,222 crore and ₹46,551 crore, respectively, indicating a significant improvement. “With the updated MoSPI figures, Meghalaya’s economic growth reflects a remarkable 17.4% CAGR from FY 2020-21 to FY 2022-23,” he added.
Addressing concerns about the fiscal deficit, Dr. Kumar explained that after revising the GSDP figures and excluding the Special Capital Assistance linked to COVID-19, the fiscal deficit for 2022-23 stands at 3.75%—well within the permissible limit set by the Government of India. He emphasized that the Special Capital Assistance, which is a 50-year interest-free loan from the Centre, should be treated more like a grant than a burden on the state’s finances.
“Debt is a public finance instrument used globally to fund infrastructure projects. Meghalaya has consistently borrowed within the limits set by the Government of India,” Dr. Kumar stated. He noted that the state’s capital expenditure nearly doubled from ₹1,903 crore in 2018-19 to ₹3,362 crore in 2022-23, demonstrating effective use of borrowed funds for critical infrastructure development.
In conclusion, Dr. Kumar assured that Meghalaya’s outstanding debt, after necessary adjustments, stands at 36.33% of GSDP for 2022-23—much lower than initially reported. “The Finance Department has implemented a sustainable debt management strategy to ensure that we meet our $10-billion economy goal while maintaining fiscal prudence,” he affirmed.
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