Northeast Desk, 4th September: Meghalaya is on track to achieve its ambitious $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. This positive outlook comes in response to a recent Comptroller and Auditor General (CAG) report, which raised concerns about the state’s fiscal health and its ability to meet economic goals.
Reacting to the CAG’s findings, Dr. Vijay Kumar D, Commissioner & Secretary in charge of Finance, emphasized that while the report pointed out challenges, particularly in Meghalaya’s Gross State Domestic Product (GSDP) growth and fiscal deficit, the state’s economic trajectory remains strong.
The CAG report highlighted that Meghalaya’s GSDP growth rates in 2021-22 and 2022-23 lagged behind the national GDP growth, and the fiscal deficit rose from 5.71% in 2021-22 to 6.55% in 2022-23, surpassing the 4% target set under the Meghalaya Budget Management & Responsibility (Amendment) Act 2022. Additionally, the Debt-GSDP ratio was reported at 43.19% in 2022-23, exceeding the target of 28%.
Addressing these concerns, Dr. Kumar clarified that discrepancies in the reported figures were due to the complex nature of India’s accounting system and frequent data revisions by the Centre. He noted that the CAG’s report on GSDP was finalized before the Ministry of Statistics and Programme Implementation (MoSPI) released updated figures in August 2024. According to the revised MoSPI data, Meghalaya’s GSDP exhibited a 17.4% CAGR from FY 2020-21 to FY 2022-23, significantly improving the state’s growth narrative.
Dr. Kumar also highlighted the state’s effective utilization of the Special Capital Assistance to States for Capital Investment (SASCI/CAPEX), a post-COVID initiative by the Government of India. This program has provided Meghalaya with increasing funds, from ₹200 crore in 2020-21 to an expected ₹2,085 crore in 2024-25, facilitating significant capital expenditure projects.
On the issue of fiscal deficit, Dr. Kumar reassured that Meghalaya’s deficit for 2022-23, after corrections, stood at 3.75%, well within the permissible limit of 4% set by the Government of India. He further defended the state’s borrowing practices, explaining that debt has been strategically used to finance critical infrastructure projects, with the state’s capital expenditure nearly doubling from ₹1,903 crore in 2018-19 to ₹3,362 crore in 2022-23.
“The debt figures, after necessary corrections, are much lower than initially reported, at 36.3% of GSDP for 2022-23,” Dr. Kumar stated. He added that these investments should be seen as strategic moves towards building Meghalaya’s future, rather than as financial burdens.
Dr. Kumar concluded by asserting that Meghalaya’s financial management is on a sustainable path, ensuring that the state remains on track to achieve its $10-billion economy goal while maintaining fiscal prudence.
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