Friday, October 18, 2024
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Fiscal profligacy of the MDA-2 Government

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Editor,
I am writing to express my deep concern regarding the employment of political appointees by the MDA-2 government who lack any real-life job experience within the department they have been put in. It is incredulous that such individuals are entrusted with advising on critical matters that directly impact the lives of citizens.
It is my opinion that most of the people appointed by this government lack the necessary practical knowledge and understanding of how things work in the real world. Their theoretical expertise, often derived from textbooks and academic research which is not their own field of expertise, is insufficient when it comes to making informed decisions that affect industries, businesses, and the economy as a whole.
For instance, who is Jemina Shylla? What is her qualification to be put in the Political department? What great businesses has Auguster Jyrwa established to qualify as vice-chairman of the Meghalaya Economic Development Council? Does Dr Aman War (an MBBS) know cement so intimately that he qualifies to be on the board of the Mawmluh Cherra Cement Ltd Company? What does a political science teacher like Charles Reuben Lyngdoh or Donkupar War know about the dealings of the State Planning Board or something called the Meghalaya Infratech Consultancy & Innovations Ltd? As per the recent revelations in the Budget Session, the list goes on.
This practice not only undermines the credibility of the government but also raises serious questions about the effectiveness of its decision-making processes. Furthermore, the reliance on such people perpetuates a cycle of ineptitude and inefficiency within the government. By not prioritizing the hiring of people with practical experience, the government is failing to tap into a valuable resource that could significantly improve its decision-making and operational efficiency.
I therefore urge the Chief Minister and his cabinet to take immediate action to address this issue and ensure that talented young people with real-life job experiences are given the opportunity to contribute their expertise to the state. Many young people are unemployed but willing and able to do a much better job. I am sure of it.
Yours etc.,
Avner Medon Pariat,
Via email

Meghalaya Budget 2024 – 25: A fiscal tightrope walk

Editor,
VPP President and Nongkrem MLA, Mr. Ardent M Basawiawmoit through his intervention in the ongoing budget session has raised a pertinent issue on the sustainability of burgeoning state’s debt which in turn has piqued public interest in the state of Meghalaya’s finances and the public debt. The issue, therefore, requires some clarity which is offered below.
The revenue account of Meghalaya which reported a healthy surplus of Rs. 652 crore in 2021-22 has gone red showing a small deficit of Rs. 44 crore in 2022-23 despite the revenue deficit grants of Rs. 1033 crore received from the 15th Finance Commission and overall growth in revenue receipts. Deficit in the revenue account implies that the excess of revenue expenditure over revenue receipts is being met through borrowings. This situation is undesirable for two reasons: (i) revenue expenditure involves spending mainly on salaries, pensions, interest payments and subsidies- commonly known as committed liabilities- which do not results in creation of assets, (ii) the multiplier effect of revenue expenditure on State’s income at about unity is almost a third of that of the multiplier effect of capital expenditure. Therefore, state’s borrowings should be restricted to expenditure on capital outlays which boost the productive capacity of the economy through asset creation and also leads to a greater expansionary effect on SGDP, both of which increase the capacity to repay the loans in the future.
Staying with capital outlay, expenditure on this account which touched an all-time high of Rs. 2752 crore in 2021-22 (an increase of 59 percent over the previous year) has shrunk marginally in 2022-23 to Rs. 2742 cr, with capital expenditure on Social and Community Services contracting by 27 percent in this period. In line with the target of creating a $10 billion economy, the State government has set an ambitious target of more than doubling expenditure on capital outlay in 2024-25 to Rs. 5870 cr which it plans to finance mainly from revenue surplus that has been budgeted at Rs. 3862 crore in 2024-25. This is a very optimistic projection given the trend in the past few years.
The outstanding debt at Rs. 17000 crore at the end of FY 2023 is nearly 41 percent of the SGDP which is significantly higher than the all India states average of 28 percent. However, the debt service ratio, measured in terms of interest payment to revenue receipts, at 7 percent is still below the 10 percent threshold above which the debt servicing becomes unsustainable as per RBI. Any drastic shortfall in revenue realization in 2024-25 will compel the government to fall back on borrowings if it is to implement the projects and schemes laid out in the budget.
Meghalaya Budget 2024-25 is an attempt to transform the economy from the low productivity trap to high productivity growth by leveraging the 10 sectors/areas/activities which has been identified as being the strength of Meghalaya’s economy. However, the financial resources that are needed to catapult Meghalaya to a $10 billion economy will have to be mobilized without compromising the long-term fiscal sustainability of the State.
Yours etc.,
Sumarbin Umdor, NEHU
Via email

Meghalaya’s development & minority rights

Editor,
I write this letter with a plea for introspection and action from the citizens of Meghalaya, particularly the youth. As we celebrate 52 years of statehood, it’s crucial to reflect on the state’s development trajectory since its inception in 1972. Despite significant allocations from the central government, Meghalaya remains heavily reliant on external funding, with little clarity on how these funds are utilized.
One glaring issue is the state of our roads. Despite hefty road taxes, navigating Shillong’s roads remains a daunting task, wasting both time and fuel. Our healthcare system is also in dire need of attention, exemplified by instances of even government officials seeking treatment outside the state. It’s imperative to scrutinize where these allocated funds are truly being spent.
Pressure groups advocating for the welfare of the marginalized have been active, yet tangible progress in crucial areas such as road infrastructure, healthcare, education, and sports facilities remains lacking. We must push the government to prioritize these essential needs, including the construction of modern stadiums that could not only host major sporting events but also boost tourism and employment opportunities.
Furthermore, the neglect of linguistic minorities in Meghalaya is a stain on our society. Despite constitutional safeguards, these communities continue to be sidelined. As a representative of the Meghalaya Linguistic Minority Development Forum, I urge the establishment of a Linguistic Minority Board to address their needs comprehensively. We have submitted our demands to the Chief Minister, and we remain hopeful for a favourable resolution that fosters peaceful coexistence and inclusivity.
In the words of Mahatma Gandhi, “A civilization can be judged by the way it treats its minorities.” It’s time for Meghalaya to uphold the principles of equality and justice enshrined in our Constitution.
Yours etc.,
S. K Choudhury
President MLMDF
Shillong -4

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