Meghalaya Governor Banwarilal Purohit is all in praise of the Congress-led government headed by Dr Mukul M Sangma in the state which has taken several initiatives to accelerate action under the sustainable development framework. He said this while addressing the assembly session of MUA-II at the beginning of its budget session, on March 3, 2017. This government will present its last Budget on March 15 next.
While at ground reality, the general masses expressed that the present Meghalaya government whose tenure will end by next year is perhaps the only one where no significant developmental work or visible infrastructure can be exhibited as in the progress reports of individual representatives or the government as a whole. The common justification is financial crunch, as the BJP is in power in the Centre while the state is being led by a Congress government. While almost all the political parties in the state have already geared up for the General Election in 2018, lobbying for party tickets has already started, so also fence jumping is underway.
In the past the last two years of the session, massive developmental work are witnessed, as the people here have very short memory, so what is seen within the last two years is the factor for gaining votes, this time due to the shortage of fund, most of the schemes and projects are kept in the incubators.
The Modi wave which hit the nation also shook Meghalaya politics, but with the recent developmental issues, demonetization has especially affected the Bharatiya Janata Party in Meghalaya as witnessed in the recent Bye-election to the Khasi Hills Autonomous District Council and Jaintia Hills Autonomous District Council. However, not only is the Indian National Congress here without a leader, so also are the Regional Parties in the state lacking good leaders to steer their respective party to form the government in 2018.
Meghalaya is known to the outside world as a place blessed with natural resources, where the flow of money is strong and the spending capacity is the envy of others. Here, government contracts and supplies is one of the main occupations for many individuals as contractors, because of the absence of industries. These forms of occupation are followed by the transport industry and real estate. The state practically has high purchasing power, all essential commodities are being imported, but for the last two consecutive years, that is March, 2015 and March 2016, the state treasury is said to have no money for any ‘Non Plan’ expenses which has caused a financial crisis in the state.
All government payments are being pushed to the next quarter as usual practiced, sometime in the month of June, completing a full fiscal year without any payment. This is for the second time that Meghalaya is facing such a crisis, where many small time contractors, suppliers and government dependant traders, due to the financial crunch are threatening to end their life, akin to the suicide of farmers in other parts of the nation.
Like last year where March 31 transactions have been so tepid, the same scenario is expected to be seen this year, turning the city into almost a ghost town, with no movement. The Treasury and Banks are not witnessing any rush while in some places in Garo Hills, the bankers have gone out on fishing trips on what is supposed to be the busiest day of the year in the banking sector.
The same is the case with government offices. In the past where for consecutive two to three days the staff works overnight, this time, these same offices wear a deserted look because both the government employees, contractors and suppliers opt to remained home, knowing the answer of each department – ‘No Fund, for every bill being produced’.
The state government had last year acknowledged that Meghalaya is facing a huge revenue shortfall due to the National Green Tribunal (NGT) ban on coal mining in the state. The ban had reduced state’s own revenue by around Rs 600 crore last year; hence the government is forced to recover the same by curtailing the Non-Plan expenses to meet the shortfall. Above that with the Change of Guard in New Delhi, the Congress ruled states are the first to feel the heat. Meghalaya, which has been pampered in the past by the United Progressive Alliance (UPA) government, is now forced to generate its own revenue.
Meghalaya, being devoid of industries, is now dependent on collection of taxes, but due to the NGT ban, there is a steep fall in business transactions which also has affected the collection. Other sources of revenue through minerals too are not there due to the same ban. However, the leakage of coal still persists even as this is not generating any of the much needed revenue for the state government. The NGT had even asked the state government to disclose the names of as many as 20 mine owners who have violated the ban.
The revenue for the state government is greatly dependent on sale of cigarette and other tobacco products. Here too there are huge leakages of taxes and smuggling of foreign brands has also affected the collection. Next is the liquor, the Excise Department have kept in abeyance the renewal of all licenses which have kept all the wine stores in the state in a dilemma as no clear explanation for the reason was provided.
A huge chunk of revenue in Meghalaya goes towards paying the salaries of the government employees. About 80 percent of the people here are holding government jobs, at the same time there is no other production or produces from the state which can improve the revenue here. Marketing of any of the products in the state is equal to nil. This has resulted in the state being sucked into a serious financial crisis.
Over dependence on central funding, exemption of taxes for indigenous tribals coupled with poor saving habits have forced this once surplus state to adopt effective measures to ensure stringent fiscal discipline to tackle the revenue shortfall faced by it.
But most surprising of all, some of the central funds were surrendered; at the same time diversion of schemes is common here, leading to difficulties to submit the Utility Certificate for central funding schemes. This is also said to be one of the reasons for the fund crunch in the state.
It is time for the state government to encourage the setting up of industries, self employment schemes and projects, at the same time prepare the ground for maintaining law and order in order to attract investors to develop the state. It is time indeed for Meghalaya to be self sufficient by generating its own revenue. This financial year ending should be the eye opener for both the government and the general public who have been too dependent on central schemes and government jobs as the only means of survival and occupation.
But none of the political parties are addressing this crisis and are upbeat with propaganda to garner votes for 2018.