By Bhogtoram Mawroh
In less than a week, the Government of Meghalaya is going to present its Budget for the year 2026–2027. Just like last year, there is sure to be a long speech by the Chief Minister, Conrad Sangma, outlining the various achievements of the government over the past year. One of the achievements that will form part of his opening speech is the claim that Meghalaya has emerged as the second fastest-growing state in the country after Tamil Nadu, with a Gross State Domestic Product (GSDP) growth of 9.66 per cent at constant prices in 2025. For comparison, it is important to note that Tamil Nadu is the second-largest economy in the country and is among the top five states with the highest per capita income. However, despite the impressive growth that Meghalaya has witnessed, it will still remain among the poorest states in the country, at least for the time being.
It is in this context that growth rates and long-term trends become very important. The announcement that the state has become the second fastest-growing economy was made by Governor C. H. Vijayashankar during his Republic Day address. During his speech, he also announced that the state is on track to triple the size of its economy by 2032. It is this second statement that holds greater significance. In his 2025–2026 Budget Speech, in the very first paragraph on state finances (Section 2), Conrad Sangma mentioned that when his government took power in 2023, the state’s GDP was Rs 42,697 crore. This, he stated, was to be increased to Rs 85,000 crore by 2028 in order to make Meghalaya a 10 dollars billion economy.
In order to achieve the target of a 10 billion dollars economy—and now the goal of tripling the economy—the state’s economy would need to grow annually by about 15 per cent. But, looking at the growth rates over the last three years, these have been around 10–11 per cent, a difference of about four percentage points. However, the 15 per cent growth rate refers to nominal growth (at current prices), which has to be adjusted for inflation, estimated at around 5–6 per cent over the last few years. When adjusted, the real growth rate (at constant prices) comes to around 9–10 per cent, which the state has indeed achieved in recent years. Therefore, if this trend continues, it is likely that the government will achieve its target, provided the exchange rate does not continue to worsen. Even if it does, the target would only be delayed by a few months, which should not pose a serious problem. At this pace, per capita income should also exceed ₹2 lakh per year, bringing the state closer to the top earners in the country. The growth rate is thus a significant achievement for the government and deserves recognition. However, there is a curious aspect of the way GDP is calculated that makes the discussion more interesting.
Let us assume that in 2024 I built a house that cost around Rs 5 lakh, inclusive of labour and materials. For some reason, in 2025 I dismantled the house, which required additional expenses of around Rs 1 lakh. I then rebuilt the house on the same site for about Rs 10 lakh. In total, I incurred a loss of around Rs 11 lakh in the process. The curious thing is that during the same period, the GDP of my region would have grown by 120 per cent—more than double. This example is critical because it reflects a common complaint heard from citizens regarding the state of infrastructure in the state. A road is built by the PWD, and after a few weeks the PHED digs it up to lay pipes. The road is repaired, and the cycle continues. Even if the same road is dug up and remade repeatedly, GDP will at least remain the same, if not grow. In reality, however, there has been no actual improvement in people’s lives. Meanwhile, contractors close to politicians continue to receive the same contracts year after year, and their bank balances keep swelling.
It must be acknowledged that many new roads are being built in the state. They look good and appear likely to last for a few years. However, some will require repairs very soon. The VIP road from Mawtawar to Umrynjah has one of the toughest climbs for cyclists, especially when the road was under repair. After it was repaired, the climb eased somewhat, but it remains formidable. Looking at the road, however, I suspect that potholes will appear very soon once the monsoon season arrives. The surface layer is quite thin, and with increasing traffic on the route, it will not be long before repairs are needed again. When that happens, the state’s GDP will once more increase by a few percentage points, and this will again be projected as an achievement.
Many of these roads are being built using loans from multilateral agencies. Recently, Santa Mary Shylla, the MLA of the Sutnga–Saipung constituency, announced that ₹260 crore has been sanctioned for road improvement, with work scheduled to commence by March this year. If the road is completed by the end of the 2025–2026 financial year, it will roughly add ₹260 crore to the state’s GDP for that year. While the project will certainly improve connectivity in the constituency, if the contract is awarded to those close to the government, it could greatly enrich a few vested interests as well. What worries some is that the funding is being provided by the World Bank, making it yet another externally aided project and raising concerns about a potential debt trap for the state in the long run.
Another issue related to GDP is that even though it may grow every year and the state may become richer in aggregate terms, this does not necessarily mean that people are becoming better off. Coal mining provides a good example. During its heyday, when the industry was in full swing, mining and quarrying accounted for around 7–8 per cent of the state’s GDP, with coal being a major component. Although coal mining takes place in several parts of the state, East Jaintia Hills has become synonymous with the industry, with the wealth generated from it laying the foundation for the political careers of many. Yet the district has the third-highest proportion of people suffering from multidimensional poverty in the state. In terms of performance against the 15 Sustainable Development Goal (SDG) indicators, the district again ranks near the bottom. Thus, while coal mining contributed to the overall GDP of the state, it did little to alleviate poverty. This is why even per capita income, which is a slightly better indicator than GDP, often fails to capture actual welfare. But the problem does not end there—there is an even more sinister side to GDP calculations.
Coal mining has also been blamed for numerous deaths, many of them among members of the migrant community, though there have also been local victims. More insidious and long-term problems arise in the form of environmental degradation and threats to human health. Water pollution is the most obvious issue and has been well documented, with water bodies turning blue and fish dying in large numbers. This forces local communities either to consume contaminated water or to purchase water for domestic use. Increased sales of bottled water contribute to GDP. When people fall sick and visit doctors or buy medicines that too add to GDP. The longer they remain ill, the more they contribute to GDP. If someone dies due to illness, the expenses incurred on funerals further add to GDP. Thus, growth in GDP is not always a reliable indicator of whether citizens are actually better off.
This discussion is not meant to be cynical about the government’s claim that the state is the second fastest-growing economy in the country. It is indeed a significant achievement and deserves celebration, especially since growth is necessary to lift people out of poverty. The question, however, is whether the goal of improving people’s well-being can be assessed solely through GDP figures. The answer is clearly no. Therefore, it is hoped that during the budget debate, the government will be questioned about the creation of decent jobs, social security, education, health, and the environment. What will matter here are not just financial allocations, but concrete results on the ground. It is also hoped that the opposition will come prepared with its own analysis so that we can better understand how the state and its people are truly faring. Only then can we have a productive budget session.
(The views expressed in the article are those of the author and do not reflect in any way his affiliation to any organisation or institution)
