Meghalaya govt asked to take proactive measures to avoid falling into a potential debt trap

Syllad | The Rising MeghalayaSeptember 2, 2024

Meghalaya is the fourth highest in the terms of Outstanding liabilities-GSDP ratio among the states/UTs in India. 

In comparison to 11 North Eastern and Himalayan States, Meghalaya stood at the third position. 

“This indicates mounting liabilities of the state. 

The state may take proactive measures to address t his concern and avoid falling into a potential debt trap,” the Comptroller and Auditor General of India (CAG) in its report on the state finances audit report for the year ended March 31, 2023.

Liabilities on the Consolidated Fund of State include market loans, loans raised from financial institutions and loans and advances received from the Government of India GOI.

The report said that during 2022-23, Public Debt liabilities stood at Rs 14,637.12 crore. This comprises  market loans of Rs 11,285.50 crore, loans from financial institutions of Rs 1,349.04 crore and Rs 2,002.58 crore loans and advances from the Government of India. 

“The increase in public debt in 2022-23 over 2021-22 (Rs 12, 165.98 crore) was 20.31 per cent. This was primarily due to increase in loans and advances frm the GOI (117.40 percent) and market loans (13.79 percent),” it said.

Further, the CAG stated that liabilities on the Consoliddated Fund of the State increased by 20.74 percent in 2022-23 over 2021-22 mainly due to increase of market loans by 13.79 percent and loans and advances from the GOI by 161.90 percent (excluding back-to-back loan to state in lieu of GST compensation shortfall of Rs 253.16 crore) in 2022-23 over 2021-22.

The state failed to achieve the total outstanding liabilities to GSDP ratio target of 28 percent set by the Meghalaya Fiscal Responsibility and Budget Management (MFRBM) Act, 2006 for the period 2018-19 to 2022-23, it also said.

CAG doubts expenditure of Rs.3,436.01 crores by Meghalaya Govt for actual purpose