SHILLONG, May 18: A mismatch has appeared in Meghalaya’s climate finance preparedness despite being one of India’s greenest states with over 76% forest cover as per the India State of Forest Report 2021, Forest Survey of India.
According to a recent joint report by NITI Aayog and the National Council of Applied Economic Research (NCAER), the state has failed to convert its ecological capital into dedicated climate funding.
The report ranks Meghalaya high in terms of natural capital but highlights its poor institutional readiness and weak infrastructure for climate adaptation (NITI Aayog-NCAER Report on Climate Vulnerability and Preparedness, 2024). In effect, the state’s forest wealth has not translated into financial support, exposing gaps in planning, coordination, and political initiative.
While several other states with lower forest cover — such as Kerala, Goa, Jharkhand, and Punjab — have successfully secured climate-specific grants from the 15th Finance Commission (FC), Meghalaya received none. These grants include Rs 500 crore for Kerala (forest conservation), Rs 355 crore for Arunachal Pradesh and Rs 700 crore for Jharkhand (renewable energy), Rs 500 crore for Goa (alternative energy and waste management), and Rs 390 crore for Punjab (air pollution and stubble burning mitigation). Meghalaya, on the other hand, has only benefitted through its increased share in the central tax pool based on its forest cover.
The policy shift began with the 12th Finance Commission (2005-2010), which allocated Rs 1,000 crore for forest maintenance (12th FC Report). The 13th Finance Commission (2010-2015) took this further by recommending Rs 15,000 crore for environmental purposes, divided equally among forest protection, renewable energy, and water management (13th FC Report).
A landmark structural shift came with the 14th Finance Commission, which integrated ecological criteria into fiscal federalism by assigning 7.5% weight to forest cover in the tax devolution formula. This was increased to 10% by the 15th Finance Commission (14th FC Report). This meant forest-rich states like Meghalaya would automatically receive more tax revenue. However, this formula-based approach did not substitute for state-specific climate investment grants, which Meghalaya failed to secure.
The report notes that while Meghalaya excels in natural capital, it scores poorly in categories like climate-related public expenditure planning, interdepartmental coordination, and project proposal quality.
