State hit by revenue loss, faces acute fund crunch

SHILLONG: The 20 per cent less share of central taxes per month, reduced GST share and overall negative impact on state economy due to ban on coal mining and coronavirus, has crippled the state finance.
An official source said that the state’s monthly share of central taxes should have been Rs 428 crore but for the last few months, the government got only Rs 342 crore each.
The official said beyond the COVID issue, the economy of the Centre is also not in good condition which affects the distribution of share of taxes to the states.
Besides the slump in GST collection, there has been no revenue collection by the Central excise and customs for the last few months as export to Bangladesh was stopped due to COVID-19.
The only relief was that on July 28, the Centre had released Rs 157 crore as GST share for Meghalaya for March to tide over the loss of revenue due to the current financial crisis.
According to the government official, as far as the state is concerned, it is depending on the Centre for most of the needs.
The state’s resource is only 15 per cent and the remaining 85 per cent comes from the Centre.
Salary burden
The state government is spending Rs 500 crore per month to pay the salary for its over 80,000 employees.
After the deferred salary for two months was paid to the state employees, the government is exploring ways and means to generate additional revenue for the payment of salary to the employees.
Chief Minister Conrad Sangma last month admitted that due to the pandemic, the state’s revenue collection was only 40 per cent. He had also said that the GST collection was also the same. Another burden for the state government is the pending arrear of 30 percent
to be paid the employees which is part of the fifth state finance commission award.
The arrear has not been paid since last December due to financial crunch.
Earlier, the employees had received 40 and 30 percent arrears in 2017 and 2018 and the last 30 percent was assured by the government in 2019 but it was not released as the government required Rs 230 crore to clear the dues.
Saving grace
The only saving element is the revenue generated due to the increase in petrol and diesel prices imposed by the state government besides the 25 percent hike in liquor price. However, this is at the cost of consumers.
The state government is also expecting funds from the 15th finance commission.
While for the April installment, the Centre had allotted over Rs 352 crore to the state government, the post Devolution Revenue Deficit Grant to Meghalaya announced in May was Rs 40 crore to tackle COVID crisis.
The ban on coal mining for over six years has also affected the economy of the state.
The direct and indirect revenue loss due to the ban on coal mining was earlier calculated at Rs 700 crore per year.
Expectation from coal auction
The state government is expecting Rs 640 crore revenue from the auction of over 32 lakh metric tonnes of coal.
Out of Rs 640 crore, after deducting Meghalaya Environment Protection and Restoration Fund, the state government will actually get Rs 488 crore.
The NGT principal bench had recently raised objection to the transportation and auction of coal as it wanted the state government to lift the coal lying at various sites to the depots and not the coal owners.
A government official said on Sunday that the government will incorporate the suggestion of the NGT.

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