By Rudi Warjri
One of the titillating and easily memorized lines when I was studying Statistics in the past was, “Statistics is like a bikini; what it reveals is interesting but what it hides is more important.” Important to a discerning observer no doubt; but means nothing to the majority who have no time for dry and boring numbers. The bikini analogy however can be applied to the latest Comptroller and Auditor General (CAG) report about Meghalaya as well the subsequent counter statement by the Government Meghalaya. It’s nothing surprising! In the past another Government of India (GoI) agency NITI Aayog had been regularly coming out with data about Meghalaya on poverty, health , education etc., which was never accepted by the Government of Meghalaya (GoM) .
It would therefore help readers that GoM should post a more elaborate and updated fact sheet or data of its own on the GoM website which is not restricted only to area , population or literacy rate . Data about students graduating each year and how many have been employed. Data on tourism footfalls, earnings by hotels and homestays, since tourism has become both a service as well as an industry. It should put out data on agriculture, industries and other allied services .
An earth-shaking watershed in the annals of India’s political economy was the economic reforms of 1991. It was a pragmatic and philosophical shift of sorts. Among several international as well as national concatenation of reasons it was also a foreign exchange crisis. India pledged part of its gold reserves to the Bank of England to secure a US $ 405 million loan. India also availed an emergency loan of $ 2. 2 billion from the International Monetary Fund by pledging 67 tons of gold reserves as collateral security. In 2024 the gold stored in the vault of the Bank of England was brought back to India because the purpose of economic growth has been served. Since 1991 India has been registering a rising growth rate. It happened because of reforms. India integrated itself with the global economy through a process of liberalization. Reforms took place in the mainstay of the economy which was the industrial sector, financial sector, tax and fiscal reforms and foreign exchange or external sector reforms. Within the industrial sector was the disinvestment of sick Government Public Sector Undertakings (PSUs). Thenceforth successive Governments in India have been trying to impress that they were more reformistic than their predecessor.
About Meghalaya, as per the CAG reports, 15 of the 17 State Public Sector Enterprises (SPSEs) accrued losses. Among them are Meghalaya Power Distribution Corporation Ltd (MeP D CL), Mawmluh Cherra Cements Ltd (MCCL) , Meghalaya Government Construction Corporation Ltd(MGCCL ), Meghalaya Transport Corporation (MTC) , Meghalaya Infrastructure Development Corporation ( MIDFCL) , Meghalaya Mineral Development Corporation Ltd (MMDCL ), Meghalaya Tourism Development Corporation Ltd (MTDC). Seven of these 15 SPEs had their equity completely destroyed by cumulative losses and their net worth was negative. Two of the SPSEs made a paltry profit while the rest were categorized as loss making SPSEs. The audit observation is that SPSEs should be told to file timely financial statements, analyse the cause of losses and take action. They were told to update the finance accounts and make corrections to the mechanism of documenting the funding granted. The CAG report also pointed to non-submission of 454 utilisation certificates worth almost Rs 3500 crore.
The CAG report also published about the debt Gross State Domestic Product (GSDP) ratio of the State and warned that Meghalaya may fall into a debt trap. The rebuttal by the State Government was that debt is a public financial instrument to boost growth used by all countries. Very true. The truth would be also clearer if the data like revenue earnings of the State and the grants and soft loan from the Centre and other agencies as well as the repayment schedules are revealed. And most importantly how much the economy of Meghalaya revolves around the Central based and funded schemes which in my view is at least 70%.
The reality is that India had to adopt state socialism after independence since there was no industrial base at all. The private sector was practically non-existent . For example, building the steel industry was fundamental to the growth of any country like in the capitalist United States or then communist Soviet Union (now known as Russia and other countries ). Hence the Government of India launched the four steel PSUs at Bhilai , Durgapur , Rourkela and Bokaro and there was mushrooming of PSUs spreading to all the sectors of the economy . It was also the failure of most PSUs that prompted the Government to make a course correction in 1991. Over the years the public centric purpose of the PSUs had been subverted and distorted. They became more institutions of favouritism and nepotism or employing politicians who have lost elections. The changes of 1991 came like a ton of bricks that said, “Change or Perish,” and the then political leaders and political class in India saw the writings on the wall. This is more so after witnessing the spectacular growth of China.
Why do we need reforms of the SPUs in Meghalaya? The amount of loss by the SPUs in 2022-23 was more than Rs 4, 000 crore. No reforms mean more subsidies to the SPUs. If GoM believes that it is rich enough to continue with the subsidies then please enjoy the party. In other words , is the continuance of the existing policy in tandem or in contradiction to the $ 10 billion economy goal? The CAG report has already recommended the liquidation of Meghalaya Electronics Development Corporation and Meghalaya Bamboo Chips Ltd. Begin with these two. GoM has already been engaging consultants everywhere . Why not use consultants for liquidation of sick SPUs? The Rs 4000 crore loss could have been used for many other pressing demands in education and health.
Cynically speaking, looking at the lack of political will or too many conflicting priorities, the talk of Viksit Bharat for India by 2047 and $ 10 billion economy for Meghalaya by 2028 reminds me of the story between Birbal mantri and Emperor Akbar. Birbal mantri was known for his sharp wit and ideas that endeared him to the Emperor. Birbal was badly in need of a horse but couldn’t afford to buy one. He had a sudden brainwave of a bright idea. In one of the court jesting sessions at the Emperor’s court he volunteered that he could make a horse talk. The perplexed Emperor asked how that could be done and how much time was needed. Birbal said seven years. So the Emperor got Birbal a horse. Later after the court session, other mantris gathered around Birbal and asked him if he had gone insane because how could he make a horse talk ? Birbal responded, “You guys have no idea.” Birbal added that in seven years either the horse would die, he himself would die or the Emperor would die. Similarly, by then like Aache din, Viksit Bharat or $ 10 billion economy goal would have been replaced by other sexy slogans. I do however have a vested interest in being proved wrong!