Northeast Desk, 2nd September: Meghalaya has been ranked fourth highest in terms of the Outstanding Liabilities to Gross State Domestic Product (GSDP) ratio among Indian states and Union Territories, according to the latest report by the Comptroller and Auditor General of India (CAG). Among the Northeastern and Himalayan states, Meghalaya holds the third position, reflecting growing financial concerns for the state.
The CAG’s state finances audit report for the fiscal year ending March 31, 2023, highlighted the mounting liabilities of Meghalaya, urging the state government to take proactive measures to avoid falling into a potential debt trap. The report noted, “This indicates mounting liabilities of the state. The state may take proactive measures to address this concern and avoid falling into a potential debt trap.”
The state’s liabilities on the Consolidated Fund include market loans, loans from financial institutions, and loans and advances received from the Government of India (GOI). In the financial year 2022-23, Meghalaya’s public debt liabilities reached ₹14,637.12 crore, consisting of ₹11,285.50 crore in market loans, ₹1,349.04 crore in loans from financial institutions, and ₹2,002.58 crore in loans and advances from the GOI.
The report highlighted a significant 20.31% increase in public debt from the previous year (₹12,165.98 crore in 2021-22). This surge was largely driven by a 117.40% rise in loans and advances from the GOI and a 13.79% increase in market loans.
Additionally, the liabilities on the Consolidated Fund of the State grew by 20.74% in 2022-23 compared to 2021-22. This increase was primarily attributed to a 13.79% rise in market loans and a 161.90% spike in loans and advances from the GOI, excluding a back-to-back loan of ₹253.16 crore provided to the state in lieu of GST compensation shortfall.
The CAG report further noted that Meghalaya failed to meet the total outstanding liabilities to GSDP ratio target of 28% set by the Meghalaya Fiscal Responsibility and Budget Management (MFRBM) Act, 2006, for the period from 2018-19 to 2022-23. The failure to meet this target raises concerns about the state’s fiscal sustainability and underscores the need for immediate corrective measures to manage the growing debt burden.
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