SHILLONG, Sept 4: With a robust 11.14 per cent compound annual growth rate (CAGR) from 2019-20 to 2023-24, Meghalaya is poised to reach its $10-billion economy target by 2027-28, aligning with strategic objectives, commissioner & secretary in-charge finance Dr Vijay Kumar D said on Tuesday.
He was reacting to the CAG report that Meghalaya’s $10 billion economy dream is dented by highlighting various fiscal parameters.
The CAG report stated that Meghalaya’s GSDP growth in 2021-22 and 2022-23 lagged the national GDP growth rates of 18.36 per cent and 16.06 per cent respectively. The fiscal deficit increased from 5.71 per cent in 2021-22 to 6.55 per cent in 2022-23 which is above the target of 4 per cent set under the Meghalaya Budget Management & responsibility (Amendment) Act 2022. The outstanding debt-GSDP ratio was 43.19 per cent in 2022-23, missing the Meghalaya FRBM Act target of 28 per cent.
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Dr Kumar however said that India’s accounting system is complex and there are challenges because of the frequent revision of data by the Centre and the methodology adopted in the calculation of different fiscal parameters.
He said that the department is developing a clarification to depict the reality of the fiscal parameters.
On the GSDP, the Commissioner & Secretary said that the report on GSDP numbers was finalised much prior to the release of the revised GSDP
numbers by the Ministry of Statistics and Programme Implementation (MoSPI) in August 2024.
He said that GSDP (AG figures) was 38785 (in 2021-22) and 42697 (in 2022-23) and GSDP (MoSPI updated figures) was 40222 (in 2021-22) and 46551 (2022-23).
The finance officer stated that Meghalaya’s GSDP growth narrative undergoes a significant revision with updated MoSPI figures. Integrating the latest MoSPI data, Meghalaya’s economic growth exhibits a remarkable 17.4% CAGR (compound annual growth rate) from FY 2020-21 to FY 2022-23.
“Consequently, the release from the Centre has increased from Rs 200 crore in 2020-21, Rs 281 crore in 2021-22 to Rs 1,049 crore in 2022-23 and Rs 1,293 crore in 2023-24. Moreover, in 2024-25 the State is expected to receive Rs 2,085 crore. Since this loan is provided for 50-year interest-free it is more like a grant to the states, though being kept as part of fiscal calculations of the state by AG and GOI,” he said while adding, “Hence, to get the real status of fiscal deficit of the state and outstanding debt the same is to be excluded from the calculation of the fiscal deficit and Debt-GSDP.”
As far as the Fiscal Deficit (FD) is concerned, Dr Kumar said, “The Fiscal deficit for the state after making both corrections is 3.75 per cent in 2022-23 which is well under the limit set by the Government of India.”
Further, the commissioner & secretary said that Meghalaya government has always borrowed under the limits set by the government of India.
“Debt is a public finance instrument to boost growth which is used by all the countries to finance their infrastructure projects. The net borrowing limit of the states is determined by the Government of India and the state of Meghalaya has always borrowed under the limits set by GoI. These borrowed funds are used effectively to invest in critical infrastructure,” he said.
“The Finance department has developed a mechanism to put the state finances on a sustainable debt path ensuring that the debt levels are within the prescribed limit to meet the twin objective of achieving the 10 Billion Dollar economy and maintaining fiscal prudence,” Dr Kumar added further. (NNN)
