Reduction in Revenue Gap Grant from 14th Finance Commission and effect of Fifth Pay Commission led to increase in deficit budget

SHILLONG, Mar 13: Chief Minister, Conrad K Sangma on Wednesday said that reduction of the Revenue Gap Grant from the 14th Finance Commission and the effect of the Fifth Pay Commission has led to the increase in this year’s deficit budget.

It may be mentioned that last year, the state’s deficit budget was Rs 1, 150 crore which rose to Rs 1, 323 crore this financial year.

Fiscal deficit, is the gap between total expenditure and revenue.

According to Conrad, the Revenue Gap Grant for this current year from the 14th Financial Commission has reduced to Rs 213 crore.

“The effect of the Fifth Pay Commission which is effective from January 1, 2017, compelling the state government to pay additional salary of Rs 1000 crore was one of the major reason why the deficit has gone up,” the Chief Minister said.

He told the Meghalaya Assembly that although the fiscal deficit has increased but the state’s revenue surplus has gone up from last year’s Rs 495 crore to this year’s Rs 738 crore.

Conrad also said that both tax and non-tax revenue from the state’s own resources was Rs 2600 this year.

The Chief Minister also said that the government expects other mechanisms to increase the state’s own tax and non-tax revenue.

Earlier, Congress legislator from Umroi George B Lyngdoh pointed out that the fiscal deficit has shot up from 0.75 per cent of GSDP in 2017-18 to 3.49 per cent in 208-19.

According to Lyngdoh, such a huge unprecedented jump in the fiscal deficit is something that is very worrying. The Umroi legislator pointed out that the Fiscal Responsibility and Budget Management (FRMB) Act is to regulate the fiscal deficit to 3 per cent.

He warned that uncontrolled spending will drown the state in debt.

“Perhaps, we need to revisit the our budget estimates of 2019-20 to ensure that the fiscal deficit is contained within 3 percent of GSDP as the projected the deficit for the 2019-20 is 3.65 percent,” Lyngdoh said.

The Umroi MLA also proposed that under the Labour department , the government should include daily wage workers engaged in units that are producing building the materials like stone quarries, brick kilns, sand collections, hollow blocks and inter locking blocks under the Meghalaya Building and Other Construction Workers Welfare Funds.

“These daily wage earners the should be provided with social security cover and insurance schemes. This proposal, if accepted will pave a new future for our citizens the who toil and sweat for their daily bread,” Lyngdoh said.

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