By Bhogtoram Mawroh
The 2024 state budget is upon us, and it will be an important occasion to reflect on and assess the performance of the state and the future that awaits it under the current MDA government. No doubt the opposition parties are already ready with queries to highlight the gaps and failings of the government, which, on the other hand, is preparing their own paperwork to highlight their accomplishments. A particular feature of the claims of this government is to claim a ‘first’ on every scheme implemented in the state. Stating it once or twice is fine, but repeating it ad nauseam makes it annoying. It’s a BJP trope, and while the allegation that the NPP is a BJP-B team is not correct, the party does mimic the national party in terms of its own marketing and branding. Hopefully this budget is less of an imitation and more talks about the substance of the state’s performance.
As mentioned above, the political parties must have already done their homework on how to corner the government. But belonging to the working class, people who live from paycheck to paycheck, I am less concerned about the politics of optics but very much about how my taxes are being spent. Are they bringing anything tangible to our lives, or are they surreptitiously being diverted to perpetuate an already widening inequality that should never happen in our indigenous tribal society? So, there are clarifications that should be forthcoming from this budget. If the political parties feel that these are genuine concerns, hopefully they will raise them in this upcoming budget session.
The figures for 2023–2024 will not be available as it will take time to compile them since the financial year will only end on March 31st. But what will be available is the data on the 2022–2023 financial year, which can provide an insight into the priorities and intentions of the government. This data should not be seen in isolation but must be compared with the 2021–2022 data that is already available (if possible since the MDA government took office in 2018) to find out the trend in expenditures under the key sectors. Rather than the Budget Estimates or the Revised Estimates, the past figures will be the Actual Figures, which are more important. According to the document ‘Meghalaya Budget Analysis 2023–24’ brought out by PRS Legislative Research (an independent research institute that aims to make the Indian legislative process better informed, more transparent, and more participatory), there are thirteen key sectors that constitute more than 2/3rd of government spending. These are – Social Welfare and Nutrition, Rural Development, Welfare of SC, ST, OBC, and Minorities, Water Supply and Sanitation, Agriculture and Allied Activities, Education, Sports, Arts, and Culture, Housing, Police, Irrigation and Flood Control, Health and Family Welfare, Urban Development, Energy, and Transport, which includes Roads and Bridges. Eight out of these 13 sectors saw a decline from their Budget Estimates to their Actuals in 2021 – 2022, i.e., less money was spent than what was promised in the initial budget speech.
In absolute terms, the biggest decline was noticed in Rural Development and Education, Sports, Arts, and Culture. Both these sectors saw a cut in expenditure to the tune of Rs 300 crore less than what was promised. In proportional terms, the biggest decline was observed in Social Welfare and Nutrition (35%), followed by Rural Development, which experienced a cut of almost 30% in their final expenditure. Though the Actuals for 2022–2023 will only be available this year, the PRS Legislative Research document did share the Budget Estimates and Revised Estimates for 2022–2023. The three sectors, viz., Social Welfare and Nutrition, Agriculture and Allied Activities, and Police, which saw a decline in 2021–2022, again saw a decline in their Revised Estimates.
Based on this, it appears that these three sectors are not a priority for the government. Incidentally, some of the health indicators that have performed worst in recent years, like child malnutrition (46% stunted) and anemia among women and children (around 50% or more), are related to one of the sectors that continuously sees a reduction in expenditure from the budget estimates, i.e., Social Welfare and Nutrition. The recent border clashes have shown that there is a need to strengthen the Police in order to counter the illegal encroachment by Assam. But with expenditure on Police being one of the first to be slashed it appears that Meghalaya will continue to be bullied by Assam. And finally, despite more than 70% of the people in the state depending on agriculture, this sector does not seem to be a priority for the government. The question that arises is: Where is the money meant for these sectors going then?
The financial cuts from some key sectors is actually going to other sectors. In 2021–2022, there were five sectors that benefited from this reallocation. The highest beneficiary was energy, which in the end got almost Rs 600 crore more than what was initially allocated to it. This continued in 2022–2023, when the Revised Estimates were again almost Rs 600 crore more than the Budget Estimates. If there are no reforms in the power sector soon, it will continue to suck money from the other key sectors. This is the second term of the MDA government, and if it is still unable to solve this then it suggests that it has no intention of doing so in the future as well. But that cannot be said of some of the other sectors, of which a very obvious one that has always seen an increase in expenditure from the initial Budget Estimates is Transport, which includes roads and bridges. In 2021–2022, the actuals were nearly Rs 200 crore more than the Budget Estimates, and in 2022–2023, the Revised Estimates actually crossed more than Rs 250 crore. What will be important to find out is how much of the new expenditure from the Budget Estimates is on repairs, digging up the existing roads, and making new ones. And has that ratio remained the same over the last few years, especially under the current MDA government? If it has remained the same or increased, this suggests a waste of scarce financial resources that could have gone to other key sectors like Social Welfare and Nutrition, Agriculture and Allied Activities, or Police. This could be a deliberate attempt to benefit certain groups or an example of gross ineptitude.
In short, the government should be asked why some sectors have always benefited from increased expenditure while others have suffered cuts. Is there a pattern here, and what are the implications of this for the state and especially for women, children, and farmers?
Finally, there’s the question of the impact of loans and debt repayment on the economy and the citizens of the state. The debt-to-GSDP ratio has been rising since 2010, with the ratio crossing 40% in recent years. This, in turn, increases the burden of loan repayment, which in 2021-2022 saw an extraordinary increase of almost 200% between the Budget Estimates and the Actuals. In absolute terms, the state had to pay almost Rs 1500 crore more than what it revealed in the Assembly. In 2022-2023, things seem to have improved, with the difference in terms of interest repayment between the Budget Estimates and the Revised Estimates being a negative 7%, i.e., the state paid less than what it initially accounted for. However, the absolute figures were more than Rs 1000 crore – Rs 30 crore more than the Budget Estimates for 2021–2022. In 2023–2024, this figure increased by another 14%. So there is an increasing burden of debt repayment that could be diverting some of the resources that could have been spent on some key sectors.
The government might argue that a major portion of the money for expenditure actually comes from loans, and therefore it is a necessary evil. This then begs the question: why is it that Meghalaya is being made to carry a lot of debt (notwithstanding the claim by the Chief Minister, Conrad Sangma, that 90% is actually paid by the Centre)? Is that model an outcome of less financial resources being made available to the state? Recently, the southern states have raised their protests against what they call injustice in terms of tax distribution, where they are not getting their due share. The 14th Finance Commission in 2015 recommended the devolution of 42 percent of central taxes to states. But in practice, the actual devolution is just over 30% because, as reported in the story ‘Budget 2023, Why has tax devolution to states been falling consistently?’ (The Hindu Business Line, February 16, 2023), The Central Government is increasingly using cess and surcharges for tax collection that are not part of the divisible tax pool and do not have to be shared with states. Is that the reason why the state has to rely heavily on loans from the open market rather than the revenue that it gets from the Centre? In that case, shouldn’t Meghalaya also join the protest with like-minded state governments over this injustice, which is increasing the burden on not just the present generation but the future generation too?
Another important question is – what the impact of interest repayment has been on jobs in the public sector. According to George Lyngdoh, a former MLA from Umroi, job creation in the public sector has been greatly affected by the debt burden. Now the Government can claim that it has instead created jobs in the private sector through the loans it has taken and supported an environment where people have become job creators rather than job seekers. In that case, the Government should provide statistics as to the number of such jobs and their comparison in terms of pay and social security to jobs in the formal sector. Still, a clarification as to whether the increasing debt burden has stifled job creation in the public sector will be very helpful so that citizens can plan their future while keeping the trends in mind. Instead of looking for jobs in the public sector, they can instead demand that jobs in the private sector have good remuneration and be provided with adequate social security. Those who are not satisfied with that can vote for the party that promises to create more jobs in the public sector starting with this MDC election. But at least people will know what to do in the future.
As someone who belongs to the working class and does not have the safety net that is available to the ‘Burom’ class, these are concerns that agitate me. I am sure it does for many others as well, as they look towards the future for themselves and their loved ones. These are also important concerns for the political establishment, particularly the Opposition parties that are looking to question the government. Else we will only have optics where there will be a display of bravado and making of loud noises with chest thumping so that the common people can be entertained like watching the Hindi serials or the Korean dramas. All the while, the state continues to perform badly in its social (health, education) and economic indicators (per capita income), and the future of its people is traded away on empty rhetoric.
(The views expressed in the article are those of the author and do not reflect in any way his affiliation to any organization or institution)