Is Meghalaya on the verge of bankruptcy?

SHILLONG, April 13? Meghalaya claims to be one of the financially best managed States in the North-eastern region but the State?s balance from current revenue (BCR) has been negative for four years indicating that the State had to depend only on borrowings for meeting its plan expenditure. Several other indicators of financial health also indicate a worsening scenario for the State which is virtually surviving on doles from the Centre. The ratio of capital outlay to capital receipts has come down from 1.90 in 1996-97 to 1.79 in 2000-2001 indicating worsening sustainability of the State. Again, the ratio of debt to gross State domestic product has increased from 0.27 in 1996-97 to 0.38 in 2000-2001 signifying reduction in Government?s ability to meet its debt obligations. The grim financial scenario of Meghalaya has been presented in the report of the comptroller and Auditor General of India for the year ended March 2001 which was tabled in the State Assembly recently. The report said that the assets of the State Government grew from Rs 2069.50 crore in 1999-2000 to Rs. 2420.28 crore in 2000-2001 showing a growth rate of 17 per cent while the liabilities rose from Rs 1164.55 crore to Rs 1462.65 crore to 26 per cent. This was mainly due to very high growth in remittance balance (68 per cent) and loans from other institutions (42 per cent). Of the total revenue receipts, Rs 926.88 crore constituting 82 per cent came from State?s share of Union taxes and duties and Central grants indicating almost total dependance on the Centre. Further, the payment of interest on borrowings of the State Government increased by 104 per cent from Rs 56 crore in 1996-97 to Rs 114 crore in 2000-2001. The public debt and other liabilities of the Meghalaya Government jumped by 138 per cent from about Rs 585 crore in 1996-97 to Rs 1394.64 crore in 2000-2001. However, very little of the borrowings were available for investment after meeting the repayment obligations. Of the over Rs 483 crore received during 2000-2001, only little more than Rs 156 crore (32 per cent) was available for investment. Even the investments made by the State Government in the State sector PSUs fetched return of less than one per cent? 0.0003 to 0.61 per cent. Another worry for the State is the gallopping fiscal deficits. It increased to Rs 249 crore in 2000-2001 from a meagre Rs 23 crore in 1996-97.