Department of Information and Public Relations

Press Release No. 148/15

CM REPLIES TO BUDGET DISCUSSION MEGHALAYA HAS BEEN ABLE TO BRING DOWN REVENUE GAP CM

Shillong, March 25, 2015: Chief Minister in-charge Finance, Dr. Mukul Sangma today stated that if a Post Devolution Revenue Gap is shrinking over the years, it is a sign that the State is actually being able to bring down the revenue gap and that “we need to clear ourselves from the perception that it is something to be cheered about if a state is receiving a huge amount of post devolution revenue gap award, but rather we should be seriously concerned about our fiscal health”.

Replying to Budget discussion which was participated by the Leader of the Opposition, Dr. Donkupar Roy and Opposition members Jemino Mawthoh and James K. Sangma among others, the Chief Minister said, “What is required to be understood is the actual resources that the State is projecting from its own tax and non-tax revenue and also what is the quantum of money that will be passed on to the state as devolution of share of taxes as per recommendation of the Finance Commission and this has been appropriated factored in my Budget speech”. “I am not trying to say that we are in a sound fiscal health but we would like to overcome that first step of being able to be free from being categorized as revenue gap state”, he added. “We have over the years increased our spending on various developmental initiatives, they are reflected by the Budget itself which is brought for the consideration of this august House. There has been steady increase of investments on crucial sectors which are linked with the majority of the population of the state, which involves the farmers, the rural population. From that perspective our strategy has been to address various issues so that ultimately everybody is benefitted by the multi-faceted interventions of the State government” Dr. Sangma said, adding that “in a healthy democracy, the government is subjected to a lot of criticism and we are receptive and accommodative to such criticisms and accordingly analyse those criticisms so that we learn more out of that and try to correct our strategy of investment in respect of various developmental initiatives”.

“Our approach has been to look at these particular sectors- the social sector and agriculture and allied sectors. If we do not take care of close to 80 per cent of our population or address their concern, it is going to be a bad approach to governance”, he added. On the concerns and skepticism expressed by some of the members of the House, Dr. Sangma said that one has to try to understand as to why it was necessary for the government to come up with certain new initiatives, adding that it has been the challenge of successive governments to bring about the convergence and coordination among the departments. Stating that the State government’s expenditure has been continually increasing with Rs. 4629 crore in 2010-11, Rs. 5740 crore in 2011-12, Rs.5955 crore in 2012-13 and Rs.6669 crore in 2013-14, the Chief Minister informed that the budget estimate has been put at Rs.11683 crore for the year 2014-15 which is expected to be less due to the unforeseen reduction in both tax and non-tax revenue. “We had a fiscal deficit of over 6 percent and we brought it down slowly so that the State is in a better fiscal state and the State’s credit rating is better than other states in the country”, he added.

“The fiscal deficit in 2011-12 was still high at 6.9 per cent, in 2012-13 we were able to bring it down to 2.08 per cent, then in 2013-14 we were able to bring it down to as low as 1.74 per cent and in 2014-15 it was 2.08 per cent. In spite of the challenges that we still continue to face and the situation which we are in, our fiscal deficit have been kept below 3 per cent”, he said. On investment in Education sector, as one of the members questioned why more investment was not being made for technical education, the Chief Minister said that his government has made a humble beginning of initiating two engineering colleges and said that anything new does require time.

He also said that certain amount of clarity was required as far as our fiscal health is concerned, what parameters had been utilized by the Finance Commission while looking at fixing the percentage from the share of taxes that would be passed on to all the states. “We need to differentiate between the share of taxes that the state will receive as per the recommendation of the Finance Commission which has been fixed at 42 per cent of the total tax resources of the Central government. The states which still have post devolution revenue gap were categorized and that is where the Finance Commission actually give direct award and this calculation is based as unhealthy, he said adding, “If we are receiving less award from the Finance Commission in respect of the post devolution revenue gap, it implies that the revenue gap that is calculated by the Commission is less, that is why we are getting less”. He deliberated at length on the innovative approach of IBDLP, which according to him is initiated to generate livelihood activities in rural areas, so that living in the rural areas and farming become more attractive and it is only through enterprise and highlighted the amount of investment on various missions under the programme like Livestock Mission, Aquaculture Mission, Apiculture Mission among others and in sectors like Agriculture, Horticulture, Soil & Water Conservations, etc.

Highlighting on the Megha Health Insurance Scheme, Dr. Sangma urged the members of the House to encourage people to avail the benefit of the scheme and also asked the Health Minister to continue aggressive registration of the target families. On Black topping of Rural Roads Scheme (BTRRS) he informed that the money for the scheme is given to every block to connect the villages and this scheme is taken up in convergence with MGNREGS. Besides that he spoke of investments on upgradation of state highways, upgradation of urban roads and important district roads, etc. On the transition from Planning Commission to NITI Ayog, the Chief Minister said that as the states minimize the centrally sponsored schemes because they have not been able to utilize them because of the obstacles which come with the guidelines, the Centre has been asked to minimize the centrally sponsored schemes and ensure that these funds are released to the respective state governments to enable them to formulate the guidelines and dovetail to its requirements to overcome the ground realities and challenges. This is one positive aspect which is emerging and also forms part of the recommendation of the Finance Commission, he added. On Health sector, the Chief Minister said that there were no ICUs in any of the hospitals in the State before the MUA took reins of the government and spoke of investments on upgradation of facilities in the number of hospitals.

On the points raised by the Leader of the Opposition, the Chief Minister replied that “our new investment strategies are all designed to take care of the poor so that people’s earning increases and their capacity to spend increases”. On the government’s concept of Green Economy, he said that sustainability of livelihood based on agro-based resources was one of government’s agenda and highlighted on the multiple uses of bamboo and Agar wood which would link concept of sustainable livelihood to sustainable economy. “These are only few of the readymade opportunities given by God and we now need to support it with appropriate government policy”, he said. The government is also looking at creating a skilled workforce to promote Meghalaya as a destination for investment and to enable the young entrepreneurs to come up with start-ups the government has approved programme for “incubation centres” at Mawpat and Ampati to start with and also approved a scheme for Industrial Promotion Centres in the districts in a phased manner, which includes West Garo Hills, North Garo Hills and Ri Bhoi. He reassured the House that all the points raised by members have been duly captured and would be utilized in a manner that benefits the people of the State.