SHILLONG: Chief Minister, Conrad Sangma has conceded that the state government was facing financial stringency largely due to non-receipt of GST share from the Centre but allayed apprehensions that government employees’ salaries, pensions and grant-in-aids to the schools would not suffer.
Replying to a call attention motion moved by Mawlai MLA, PT Sawkmie on a new item published in The Shillong Times “Centre allows Meghalaya to borrow Rs 194 crore to tide over cash crunch” Chief Minister, Conrad Sangma said that the state government is prudently managing its expenditure during these difficult times for the economy and state finances, adding that the government was utilizing all available resources to meet both establishment and development expenditure.
He also said that the next few months will be important as far the financial situation of the state even as he added that the concerned departments were trying their best to ensure that instalment of the MLA scheme was released before Christmas.
Earlier, Sangma said that the pandemic had caused unprecedented economic and social disruptions to global, national and local economies and as Meghalaya’s own tax and non-tax revenue comprise only 20 per cent of total revenue receipts, the state was largely dependent on transfers from Union Government to meet expenditures.
Stating that every state is allowed to borrow annually upto 3 per cent of its GSDP as per FRBM Act, he added that for this current financial year, given the fall in revenues of both the Union and state government, the Centre in May this year allowed the state to avail additional borrowing of 2 per cent of the GSDP over and above the normal 3 per cent borrowing limit.
“Further, in September Department of Revenue, Ministry of Finance, held discussions with the state governments on the issue of compensation to the states due to GST fall and as pandemic has affected the collection of GST cess meant for the GST compensation fund, from where states are being compensated for loss in revenue due to implementation of GST.
Based on these consultations, the state government agreed to the proposal of the Union Government that shortfall in GST compensation will be met through a special borrowing dispensation.
This dispensation allows the states additional borrowing to make good the GST collection shortfall over and above the 5 per cent borrowing already allowed to the state.
Earlier while moving the motion, Sawkmie admitted that the pandemic had caused huge disruptions everywhere but government should make sure the salaries of government employees were made every month without delay.
