Government of Meghalaya

Budget Speech

2000 - 2001


Shri A. H. Scott Lyngdoh

Finance Minister, Meghalaya

28th March, 2000


Mr. Speaker, Sir

I rise to present the Budget Estimates for the Year 2000-2001. This is the third Budget of this august House which has  continued to ensure the highest traditions of democracy, as  evidenced by the smooth transition  of power, a few days ago, as always before.  This Budget covers the first year of the Eleventh Finance commission Award and the fourth year of the Ninth Five Year Plan.



Neither has the Eleventh Finance commission made its' Award till date, nor has the Planning Commission finalised the size of the Annual Plan 2000-2001. 

Based on the Eleventh Finance Commission's Interim Report  to the Central Government, certain lump sum provision for providing the States' share of Central Taxes and devolution of other resources appears to have found a place in the Union  Budget, but no indication is available of the  amount  to be  allocated to the States, as yet. The Budget Estimates have therefore been formulated on the basis of the level of current year's  share on such account, mutatis-mutandis, as and when the details are made known to the State.  

The Draft Annual Plan for the year 2000-2001 as submitted to the Planning Commission proposes an Outlay of Rs. 517.00 Crores which is 11.18 per cent higher than the current year's approved Plan Outlay. This has been incorporated in our Budget Estimates subject to similar adjustment, as and when the Planning Commission  finalises the Annual Plan size.  

Before, I present the budget Estimates for 2000-2001, I propose Mr. Speaker,  Sir  to give as brief review of the National Economy, following by a similar review of the State  Economy and highlight the performance and proposed programmes of the various Departments.




 The Union Budget presented to Parliament by the Union Finance Minister, a few days ago, indicates an expected 5.9 percent growth rate of the national economy during the current year. It also indicates that the continuing decline of industrial growth during the last two years has been arrested.


An analysis of the overall economy  during 1999-2000 indicates that -

* the contribution of the manufacturing sector to the Gross Domestic Product  during the current year is likely to be as high as 7 percent which is almost double the 3.6 percent contribution during 1998-99.

* Likewise, the contribution of the construction sector to the GDP is likely to reach 9 percent  during the current  year, as compared to 5.7 percent during 1998-99.

The export performance is at par with  the better performing emerging economises.

The rise in our Stock Market indices reflects the restoration of confidence in Industry.

*  During the current year, a dramatic drop in inflation has taken place. For the first time in recent decades, the inflation rate has dropped to international levels, of 2 to 3 percent as compared to 8.8 percent during September, 1988.

* A good agricultural growth  during 1998-99 and increasing openness of the economy to manufactured imports have contributed to decline in inflation.

* The removal of import and export controls on agricultural products and a rational and stable agriculture  tariff structure appear to have moderated fluctuations in agricultural prices.

* The balance-of-payment position remains buoyant despite the twin shocks of the East-Asian crisis and the post-Pokhran sanctions, registering low current account deficit and adequate capital inflow. This has resulted in the rise of foreign exchange  reserves to a level of over 2.4 Billion US Dollars and stabilising the exchange-rate.

* The year is expected to end with a current account deficit of 1.6 to 1.8 percent.

* However, during the current year, foodgrain production dropped to 199.1 million tonnes as compared to 203 million  tonnes during 1998-99.

* Despite the sharp increase in money-supply, domestic savings during 1998-99 dropped to 22.3% of the G.D.P.  at current prices, as compared to 24.7 percent during 1997-98. This may partly be due to the fall in interest rates. The fiscal deficit as a proportion of G.D.P. at current  prices is likely to exceed 5 percent during 1999-2000.




The Net State Domestic Product at current prices which stood at Rs. 64.41 Crores in 1972-73 rose to Rs. 2164.09 Crores during 1998-99 and is likely to reach Rs.2287.92 Crores  during the current year.


The Net State Domestic Product in terms of Per Capita Income at current prices has increased from Rs.538 in 1970-71 to Rs. 11382 during 1998-99, as against an all-India increase from Rs.633 to Rs.14682 during the same period.


The advance estimates of NSDP for the current  year is Rs.12466 per capita as against in all-India estimate of Rs.15841. Though the estimated annual growth rate during the current year is 6.05 percent, the average per capita income is about  21.3 percent lower than the all-India average level.


The Gross State Domestic Product at constant prices has increased from 0.37 percent during 1994-95 to 2.15 percent during 1996-97 and a growth of 2.33 percent is anticipated during the current year.


During the above period, the sectoral contribution of the Primary Sector at constant prices has fallen  from 40.84 percent to 28.24 percent, the Secondary  Sector from 13.23  percent to 12.74 percent, while the contribution of the Tertiary Sector has risen from 45.93  percent to 59.02 percent.


The volume of Indo-Bangla trade in the Meghalaya Sector  has been sharply increasing from year to year. coal, Limestone and agricultural  produces are the main bulk-goods traded through Dawki and other border transit routes. The  existing Custom-cum-Immigration Post at Dawki located at the Indo-Bangla border is unable to cope with the ever increasing volume  of trade, causing a major bottle neck in the growth of Indo-Bangla trade of the Meghalaya sector. The Prime Minister  had been urged during his recent visit to 'Shillong for upgradation of the existing facilities  and establishment of a full fledged Inland Dry Port at Dawki, with ability to handle 500 to 600 truck loads of trade per day, and for upgradation of other Border Transit-Routes. The Prime Minister has announced that the Central Government will fund the project at a cost of Rs.5.00 Crores. A high level  team has already visited the site and steps are in hand to establish the Inland Dry Port at Dawki.



Now, I propose to briefly  review the financial position of the State over the period covered by the Tenth Finance commission Award, commencing 1995-96. The principal sources of the State's Finance  are Tax and Non-Tax Revenue Receipts, Capital Receipts, Share of Central Taxes and Tariffs, and Loans and Remittances.


The Total Receipts on Revenue Account increased from  Rs. 683.89 Crores during 1995-96 to a likely level of Rs.1068.28 Crores during 1999-2000, registering an increase of  56.2 percent.


Collection of Tax Revenue increased from Rs.66.26 Crores during 1995-96 to a likely level of Rs.109.92 Crores during the current year, registering a 65.8 percent increase over the period.


During the year, steps were taken to strengthen the enforcement of Excise laws with a view to check the sale of illicit liquor, to detect the evasion of Excise Revenue and to penalise defaulters. Excise  Slabs for IMFL and corresponding rates of Excise Duty were also revised upwards. These measures have resulted in the collection of Excise Revenue exceeding Rs.39.20 Crores during the year as compared to Rs.32.68 Crores  during 1998-99 registering and increase of over 19.9 percent.


Uniform Floor Rates of Sales Tax were introduced in the State along with the rest of the Country  with effect from the fist day of January. 2000 in conformity with the decision taken at the Conference of  Chief Ministers held at  New Delhi on 16 November, 1999. Enforcement of taxation laws, prevention  of tax evasion and collection of taxes were strengthened and revamped. These measures are expected to result  in collection of Sales Tax exceeding Rs.54.35 Crores during 1999-2000, as compared to Rs.45.92 Crores during the previous year, registering an increase of 18.3 percent.


Collection of Non-Tax Revenue increased from Rs.66.92 Crores during 1995-96 to a likely level of Rs.72.01 Crores during the current year, registering a 7.6 percent increase over the period.


The overall growth rate of the State's Own Resource through Tax and Non-Tax Revenue over the aforesaid period is 36.6 percent.


the State's Share of Central Taxes increased  from Rs.159.71 Crores during 1995-96 to a likely level of Rs.342.81 Crores during the current year, registering an increase of 114.6 percent.


Cumulative borrowings rose from Rs.381.01 Crores during 1995-96 to a likely level of Rs.728.00 Crores during the current year, registering an increase of 91.07 percent.


Consequently, the Debt Service burden for repayment of principal and interest rose from Rs.106.43 Crores during 1995-96 to Rs.165.49  Crores during the current year. As a percentage of the total budget, the Debt Service Burden fell from 13.36 percent during 1995-96 to 11.18 percent during the current year.


In the meantime, the total number of  Government Employees increased from an estimated 37805 during 1995-96 to 41398 during the current year registering an increase of 9.5 percent over this period. The corresponding increase in expenditure on Salaries and Allowances  during the period increased from Rs. 216.17 Crores during 1995-96 to Rs.446.68 Crores during the  current year, registering an increase of 106.63 percent.


At the same time, the Total Revenue Expenditure of the State increased from Rs.580.39 Crores during 1995-96 to a likely level of Rs.1082.73 Crores during  the current year, registering an increase of 86.5 percent.


Thus the rate of increase  of the Revenue Expenditure has been faster than the rate of increase of the Revenue Receipts during the aforesaid  period, giving rise to an increasing  revenue gap and consequential budgetary deficits.


The Budget deficit of Rs.70.87 Crores  during 1995-96 has increased to a likely deficit of Rs.142.47 Crores during the current year.


Increasing budgetary gaps have however not resulted in any decrease in the level of Capital Expenditure, which increased from Rs.159.99 Crores during  1995-96 to a likely level of Rs.322.67 Crores during the current year, registering an increase of 101.68 percent  during the aforesaid  5 year  period.


Capital Expenditure  as a percentage of Total Expenditure marginally increased from 20.08 percent during 1995-96 to a likely level of 21.31 percent during the current year.


The emerging position has led to increasing  fragility of State finances. The State has therefore resorted to measures to curb relatively non-essential expenditure and optimise control over its Ways and Means position. Nevertheless, the inelastic resource position has had to  absorb an  ever increasing expenditure due to inflationary pressures and security related activities. The other States of the N.E. Region  also face similar fiscal constraints due to the region's structural imbalances.


The  LOC (Letter of Credit) and LOA (Letter of Allotment)  System had been introduced during 1998-90, to cover major spending Departments, with a view to minimize any mismatch between the State's Receipts and Expenditure and to further tighten expenditure control mechanism to reduce comparatively low priority utilisation of resources. All Departments have taken closely supervised steps  to prioritise their projects and schemes so that fund constraints do not adversely affect smooth continuance of essential development programmes. The LOC/LOA system has proved to be an useful tool and has ensured that inspite  of the continuing fiscal constraints, the critical programmes have not been allowed to suffer for want of funds. It has been decided to bring all Departments  of the State under the LOC/LOA System with effect  from the first day of April, 2000.




As this House is aware Mr. Speaker Sir, House Committees will for the first time examine the budget Estimates now being presented. The Departmental budget estimates will be discussed and scrutinized by these  Committees. The Reports of these Committees will be presented to the reconvened budget Session for further discussions before the Demands for Grant are taken up for consideration and passage. It is my sincere hope and expectation that this newly evolved system of House Committees will lead to a better and more pragmatic evaluation  of the Budget Estimates and the Plan Schemes of various Departments




The Non Plan Budget Estimates for 2000-2001 envisage an outlay of Rs.964.57 Crores, which is 7.7 percent higher than the likely non-plan expenditure of Rs.895.58  Crores during the current year. Every  attempt has been made to adequately provide for the cost of salaries, allowances,  office and travel expenses, repayment of principal and interest thereon and critical maintenance costs of normalised projects. While efforts to minimise non-plan  expenditure will continue, every attempt has been made to ensure that such efforts are made on a rational basis and critical segments of expenditure are protected and adequately provided for.


PLAN BUDGET 2000-2001


The approved Ninth Plan Outlay is Rs.2500.62 crores. The Plan expenditure during the first two years of the Ninth Plan were Rs.248.83 Crores during 1997-98 and Rs.299.09 Crores during 1988-99. Although, the approved plan outlay  for the current year is Rs.465.00 Crores, plan borrowings have been restricted with a view to ensure that debt service burden does not reach critical levels. Due to consequential plan resource constraints, a revised Plan Outlay of Rs.350.00  Crores only for the current year has been approved by the Planning Commission. thus the cumulative Plan Expenditure  during the first three years of the Ninth Plan period is likely to stand at Rs.897.92 crores which reflects 35.9 percent of the approved Ninth Plan Outlay. The position is not very much different in the other Special Category States.


 The proposed Annual Plan size of Rs.517.00 crores for the year 2000-2001 is 47.7 percent higher than the likely Plan  Expenditure of Rs.350.00 Crores during the current year.




* The pace of growth and development depends on the level of peace and harmony. The State has remained generally peaceful during the year, except for some isolated incidents of robbery, dacoity and extortion, by limited and misguided groups of individuals. Regional and local militant outfits have also resorted to a number of killings and kidnappings. Government is determined to  contain such anti-social activity and to wean away members of such outfits through appropriate rehabilitation schemes.



*  The State's economy is  primarily agricultural. the gross cropped area of 2.47 lakh hectares during 1995-96 is expected to increase to 2.9 lakh hectares or 12.92 percent of the State's geographical area,  during 1999-2000, registering an increase of 17.4 percent  during  the period . Attempts will be made to increase the gross cropped area to 3.00 lakh hectares during 2000-2001.

* During the same period, total foodgrain production is expected to increase from 1.74 lakh tonnes to 2.13 lakh tonnes, registering an increase of 22.4 percent. Of this, Rice which is the major crop accounts for 1.48 lakh tonnes or 69.4 percent of the total foodgrain production. The target for the next year has been fixed at 2.28 lakh tonnes.

* The production of Potato which is also a major crop is likely to increase from 2.08  lakh tonnes during 1995-96 to 2.34 lakh tonnes during the current year, registering an increase of 12.5 percent during the period.

* The production of Cotton and Jute & Mesta which stood at 0.0532 lakh bales and 0.4883 lakh bales during 1995-96 is expected to increase to 0.0648 lakh bales and 0.6032  lakh bales during 1999-2000 , registering an increase  of 21.8 percent and 23.5 percent, respectively, during the same period.

* Likewise, horticultural produce is expected to increase from 2.10 lakh tonnes during 1995-96 to 3.62 lakh tonnes during the current year registering an increase of 72 percent over the period . This production is expected  further increase by 12.7 percent to 4.08 lakh tonnes during 2000-2001.

* The area under cultivation of High Yielding Varieties of Paddy, Wheat and Maize increased by 31 percent over the same period, that is from 0.58 lakh hectares to an expected  level of 0.76 lakh hectares. The area targeted to be covered by HYV during next year is 0.98 lakh hectares.

* The State Agricultural Marketing Board has taken steps to operationalise auction platforms for agricultural and horticultural produce with grading and storage including cold-storage facilities at the Wholesale Regulated Market  Yards which had been earlier set up at Mawiong and Garobadha.

* The  Support Price mechanism for agricultural prices will be operationalised, as an when necessary.

* The flow of micro credit as an essential input for agriculture has been unsatisfactory. While deposit mobilisation  by banks  has  continually been increasing and has crossed the Rs.1551.00 Crores level, the Credit: Deposit ratio is around 18.41 percent, as compared  to a level of 60 percent in other parts of the country. The financial institutions  have pleaded helplessness citing lack of land-records and mounting non-performing assets in the form of overdues, as hurdles to the smooth flow of credit. The State has urged the Banking  Division of the Central Government to cause banks to accept land records  issued by the District Councils, for the purpose of hypothecation of land. Also, to cause flow of agricultural credit regardless of the level of their Non Performing Assets, except in case of willful default.

* The plan investment in the Agriculture sector increased from Rs.10.53 Crores during 1995-96 to a revised level of Rs.13.58 Crores  during the current  year. An amount of Rs.17.05 Crores is earmarked for this Sector during 2000-2001 reflecting an increase of 25.5 percent  for this sector.



* The gains of improved and scientific agricultural practices get negated by the effect of continuing large scale shifting cultivation. Efforts made since the inception of the State have resulted in reduction of the numbers of jhummia-families from 68,000 during 1971-72 to 49.500 at present. Jhum-Control, Watershed-Management and Afforestation of Degraded lands continue to be the focus of Soil & Water Conservation Programmes in the State. The Sectoral Target for 2000-2001 includes:-

(a) Land development, terracing, afforestation , and waster management of an area of 1450 hectares, besides maintenance of 6611.65 hectares of existing plantation..

(b) Erosion Control works of 864 hectares, and 

(c) 160 units of Waster harvesting and farm-ponding.

*The cash crop development programme will continue to be in focus during the year 2000-2001. The Meghalaya Commercial Crop Development ?board which had been set up earlier will be revamped and made operational during the year.

* The paln investment on this sector increased  by 6.7 percent from Rs.6.37 Crores during 1995-96 to the revised level of Rs.6.80 Crores during the current year. An outlay of Rs.7.30 Crores is proposed for next year.



* Animal Husbandry and Dairy Development will continue to play an important role for the sustainable development of rural economy.

*Egg production  is expected to increase from 77 million to 85 million  and meat-production  from 26.500 tonnes to 3000tonnes over the period 1995-96 to 1999-2000. Egg and meat production for 2000-2001 is targeted at 87 million and 33000 tonnes respectively. Nevertheless, the requirement for animal products, remain over 50 percent insatiated and the State will have to continue to depend on supplies of eggs, mean and other animal products from other States, for the next few years

* Likewise milk-production has marginally  increased  from approximately 0.55 lakh tonnes to 0.62 lakh tonnes during the last five years.

* Self Employment  Projects in piggery, dairy and poultry will be encouraged.

*Plan investment on this sector increased  from Rs.6.21 Crores during 1995-96 to Rs.7.50 Crores during the current year. With a view to attain self-sufficiency in this sector within a reasonable time frame of 10 years or so, an intensive programme for upgradation of livestock and promotion and popularisation of Animal Husbandry and Dairy activity will be undertaken. Consequently, the plan investment for Animal Husbandry & Dairy Development during 2000-2001 has been increased by 59.0 percent over the current year's revised level and fixed at Rs.11.93 Crores



* The fishery potential of the State is yet to be adequately topped. Inland fish production has increased from  3580 tonnes during 1995-96 to an expected level of approximately 5000 tonnes during the current year. The sectoral plan outlay increased from Rs.0.77 Crore during 1995-96 to a revised level of Rs.1.00 Crore this year.

* However, over 90 percent of our fish requirement is met by supplies  from other States. A vigorous programme for inland fish production is a paramount need.

*In order to provide the required incentive for accelerating fish production, the sectoral outlay has been increased by 75 percent over the current year's revised level and fixed  Rs.1.75 Crores during 2000-2001.



* The Meghalaya  Cooperative Apex Bank which is the flag bearer of the Cooperative Movement in the State, has been able to maintain a high Credit : Deposit Ratio of 38 percent, as compared to an overall level of 18.41 percent for all Banks in the State.

*The main thrust of the sector during 2000-2001 will be to revitalize Cooperatives in priority areas, through an intensive programme for strengthening cooperative training and education.

*The revised sectoral outlay of Rs.2.50 Crores  during the current year has been increased  by over 53 percent  to Rs.3.83 Crores during  2000-2001.



The fragile State economy which is mainly agriculture and forest based has been further compounded by Supreme Court directions regulating the operation of community and  private forest-plantations. While a viable and pragmatic forest policy aimed at controlled  felling and disposal  is fully endorsed, a better appreciation of time tested ground realities relating to customary  clan, community and individual forest ownership practices would have minimised the sufferings and hardships of the people and could have avoided reduction of a sizeable population to the brink of economic disaster.

* The Central Government and the international community of donor nations and organizations like the International Fund for Agricultural Development (IFAD) have been urged  to support in interventional programmes for the sustainable management and development  of the community resources of the rural poor, through better awareness of the need for  regulating forest operations and adopting scientific management practices. The lush green forest cover of the State contributes significantly to the purity of local, regional and global environment through carbon sequestration. The State has, therefore, sought the support of the international community for compensating the contribution of such forests to global environment, through suitable Grants for developmental programmes.

* Bamboo is a native plant of our State. Since Bamboo is a Non Timber Forest Produce which can bring succour and sustenance to the thousands of forest plantation workers who have  been affected by the implementation of the Apex Court Orders, a Bamboo Resource Development Project has been formulated and submitted to the Government  of India  , as well as to IFAD for consideration and funding support.

* The endeavours of the Forest Department to augment the forest and wildlife wealth of the State is expected to bring an additional area of about 1167 hectares under forest cover, during the year. The Department will continue to bring more barren degraded areas under Social Forestry plantation.

* Measures to protect reserve forests, including preparation and implementation of working plans have been geared  up. Efforts will be intensified to improve the extent and quality of protected habitats of Wild Life in the State.

* A  provision of Rs.8.00 Crores has been made in the plan Budget Estimates as against an expected utilisation of Rs.6.50 Crores during the current year.



 * During the year, the Government of India introduced 

(i) the Centrally Sponsored Swarna Jayanti Gram Swarozgar Yojana (SGSY)  by integrating the erstwhile IRDP, the TRYSEM, the DWCRA,  the SITRA,  the GKY the MWS and 

(ii) the Centrally Sponsored Jawahar Gram Samridhi Yojana (JGSY) by redesigning the erstwhile JRY, while

(iii) Restructuring  and strengthening the ongoing IAY and the EAS

* While the anticipated expenditure under these programmes during the year 1999-2000 is Rs.7.65  Crores, a provision of Rs.11.24 Crores has been included in the Budget for 2000-2001.



* During 1999-2000, a total of 20.70 lakh mandays of rural employment is expected to be generated  under the various Centrally Sponsored Employment Generation Programmes. These programmes will continue with intensified vigour during 2000-2001.



Community & Rural Development Blocks constitute the cutting edge of development administration, particularly poverty alleviation in Meghalaya. During the year, every effort has been made to upgrade the facilities and mobility of the Block Officials, to enable them to reach the people effectively.

Budgetary provisions for C.D. Programmes during the year 2000-2001 has been increased to Rs.4.40 Crores which is 10 percent higher than the current year's provision.



This programme which is implemented with the direct involvement of the beneficiary community has generated sustainable community assets.

Keeping in view the popularity of the programme and the good public response, the fund allocation has been increased from Rs.18.00 lakhs to Rs.20.00 lakhs per rural MLA Constituency and from Rs.9.00 lakhs to Rs.10.00 lakhs. per semi-rural  MLA constituency, during the current year. Budgetary provisions have been  made to further increase this amount to Rs.25.00 lakhs and Rs. 12.50 lakhs per rural and semi rural MLA Constituency, respectively, during the year 2000-2001.



In addition to the existing SRWP, the Chief Minister's Special Rural Development Fund is being created for funding Schemes of critical public importance which may be identified by the Chief Minister in consultation with public representatives. Individual beneficiary will not be eligible under the Scheme. These schemes will be implemented through the Deputy Commissioners as per Guidelines formulated in the spirit of the SRWP  guidelines.

An amount of Rs.4.00  Crores will be provided for the programme during 2000-2001.



* Government is committed to improving the economic condition of the people residing in the areas bordering Bangladesh. To ameliorate the hardships faced by such people, several Boarder Area  Development Schemes have been taken up through different departments for  bringing parity in the quality of life of the people living in such areas.

* To encourage the pursuit of education in Border Areas, it is proposed to cover 18600  border area students under the scholarship schemes during 2000-2001.

* Horticulture, Soil Conservation, Road Connectivity, and construction of rope-ways for transportation of local produce to road-heads in border areas have received priority during the current year. Of the 19 rope-way schemes under construction, four have been completed and commissioned  and the rest will be completed during the course of the next few months.

* During 1999-2000 , an amount of Rs.7.76 Crores has been provided for the programme as against Rs.5.26 Crores during 1998-99.

* State Government has urged the Central Government to re-open Border hats for resolving the marketing problems in respect of the produce of such areas



*Implementation  of the Rongai Valley Irrigation Project at a cost of Rs.16.30 Crores will be completed within the Ninth Five Year Plan period.

*During the current year investigation of the proposed Pynthorwah, Pynthornein, Mawramihah and Kodaldhowa Irrigation Projects are being sanctioned.

*The plan fund allocation for this sector during 2000-2001  has been tripled to Rs.6.00 Crores from the evised level of Rs.2.00 Crores during the current year.



* Assured  availability of water for multiple cropping programme of high yielding varieties of foodgrains in limited and scattered tracts of cultivable  land is the principal objective of Minor Irrigation and Command  Area Development Programmes.

* Till date, only 0.24 lakh hectares of the 2.18 lakh hectares of irrigable land have been provided  with irrigation.

* The plan budgetary provision for the minor irrigation sector has been increased from the revised  level of Rs.7.00  Crores during  the current year to Rs.12.00 Crore  during 2000-2001, registering a 71.4  percent  increase. In addition  to this a provision of Rs.2.00 Crores for the Command Area Development programme is also provided.



The State Electricity board has decided to implement the 2.42 MW Myntdu Leshka Hydro Electric Project, which has been techno-economically cleared by the Central Electricity Authority  during September, 1999 at a cost of Rs.285.00 Crores, but required Environment Clearance from the Central Government is awaited. An  amount of Rs.2.00 Crores stands provided under the revised State Plan Outlay for the current year for project preparatory activities.

* The renovation and modernisation of Umiam Stage-I Power Station at an estimated cost of Rs.65.00 Crores is under implementation and likely to be completed within a year.

* For the first time, an amount of Rs.2.50 Crores has been provided under the Plan during the current year, for undertaking Village Electrification in Rural Areas.

* The MeSEB and the State Government  are making all possible efforts to obtain payment of arrear energy-supply dues exceeding Rs.120.00 Crores from the Assam State Electricity Board.



Efforts to harness alternative and non-conventional sources of energy are continuing through the Meghalaya  Non-Conventional & Rural Energy Development agency (MNCREDA).

The MNCREDA is causing installation of 3 KW Micro Hydel Projects at Galwang in West Garo Hills, Rangap in East Garo Hills and Umlieh in Ri-Bhoi district.



259 Village and Small Industries are being supported in addition to training 100 entrepreneurs and providing incentive to 279 Beneficiaries during the current year, at an expenditure of Rs.2.45 crores.



* The increasing number of our educated un-employed require large scale generation of employment opportunities through accelerated industrialisation.

* With a view to promote and  support  industrialisation, the State Industrial Policy, 1997 with a package of direct and indirect incentives has been operationalised.

* Infrastructure such as the Export Promotion Industrial Park at Byrnihat and the Industrial Estates at Umiam, Jowai, Tura, Nongstoin, Williamnagar and Mendipathar have been set up and provided with roads, water supply and power. Extensive financial and tax incentives are also available under the provisions of the Industrial Policy, through the Meghalaya Industrial  Development Corporation.

* The Khadi and village Industries Board continue to undertake rural employment generation programmes, intensive block development and consortium lending schemes.

* The MCCL which is the largest industrial unit in the state sector has continued to generate operational a profits and has paid a dividend of Rs.0.5955 Crore to State Government during the current year.

* Production of cement during 1999-2000 is likely to be 1.20 lakh tonnes as compared to 1.07  lakh tonnes during 1998-99.

* The plan outlay for this sector has been increased to Rs.9.00 Crores during 2000-2001 as compared  to the revised level of Rs.6.75 crores during the current year.



* Sericulture and Weaving are two eco-friendly industries with tremendous potential for generating gainful employment opportunities amongst the weaker sections of the rural poor.

* the NEC funded project for the Integrated Development of Muga will be continued and accelerated during the year 2000-2001.

* The Department also proposes to implement Central Silk board programmes for development of Non-Mulberry based Eri Muga varieties of Silk.

* The production of Mulberry  and Eri Silk Cocoons in the State has increased from 1.86 lakh kilograms during 1995-96 to an expected level of 3.71 lakh kilograms during the current year. Similarly, the production of Muga Silk Cocoons is expected to increase from 46.91 lakhs to 112.20 lakhs over the same period.

* Likewise the production of handloom fabrics in the State has nearly tripled from 22.20 lakh square metres during 1995-96 to an expected level of 64.40 lakh during the current year.



* Endeavours to tap the rich mineral resources of the State will continue.

* With a view to ensure fullest collection of mineral revenue and to check evasion thereof, electronic weigh bridges will be installed at Mookyndur, Dawki and Ghasuapara.

* Steps will be taken to check un-regulated quarrying of stones, shingles, sand and other minor minerals, as well as to ensure fullest collection of royalties thereon.

* An amount of Rs.48.82 Crores is expected to be collected during the current  year as mineral revenue. This is likely to increase of Rs.62.00 crores during 2000-2001



* Since road transport is the only means of communication in the State, the development of  road communication and road transport  are vital for the economy. Consequently, the roads & Bridges Sector has continued to receive the highest priority. During the current year Rs.84.50 Crores or 24 percent of the revised  Plan outlay has been allocated  to this sector.

* The State now has a total road length of 6967 Kilometres or a road density of 31.06 Kms per 100 Sq.Km which is still below the prescribed bench mark of 40 Kms per 100 Sq.Km. for hill areas.

* Till 1998-99 only 2573 of the State's 5484 Villages had been connected by roads. Efforts to provide road connectivity to all Villages will be intensified, with particular emphasis on border areas. 60 more villages are expected to be connected by roads during the current year.



For the growth and development of road transport, Government, will continue its liberal policy of issuing  road permits for operation of transport services. The State  recently introduced the Scheme for issue of permits for All  Meghalaya Tourist Taxi Cab to supplement existing public transport facilities.



The programme for establishment of ropeways, wayside amenities, motor driving schools and assistance to transport operators who belong to the weaker sections for procurement of vehicle will continue.

A plan budgetary provision of Rs.5.18 Crores has been made for 2000-2001 as compared to the revised provision of Rs.0.38 Crore during the current year. This include Rs.3.18  Crores for completion of the Baljek 'Airport and Rs.1.50 Crores for land  acquisition for the proposed upgradation of the Umroi Airport.



The State is pursuing its proposal for upgradation of Umroi Airport. This scheme is included in the Prime Minister's  package for the North East and efforts are being made to obtain funds from the Non-Lapsable Central Pool of Resources for implementation of this Project at an estimated cost of approximately Rs.35.00 Crores. In the Memorandum submitted to the Prime Minister during his recent visit to Shillong, the State has urged for reintroduction of the Calcutta-Shillong Air Service either by Indian Airlines or any other private carrier, preferably using 50 Seater Air Craft, till the Umroi Airport is suitably improved. It is learnt that the proposal is under favourable consideration.



The State Helicopter service is 75% subsidised by Central Government. The service presently connects Shillong, Guwahati and Tura. A Permanent helipad is proposed to be built at Mawdiangdiang during 2000-2001.



The Meghalaya Transport Corporation has been running on continual loss. It has utilised over Rs.12.00  Crores of share capital released by State Government during the last ten years or so, for meeting its revenue gap. As at present, the Corporation's revenue earnings are barely sufficient  to meet running costs. The monthly salary bill of its' employees amounting to approximately Rs.0.50 Crores is being mostly met from State Grants. The possibility of privatising State Public Sector Undertakings including MTC is being examined by Govern mend.



* The programme for popularization of Science & Technology will be continued. Student programmes particularly Research Oriented Activities by College  Students  will be encouraged through the State Council of Science Technology & Environment in order to develop their scientific temper and outlook.

* During the current year Schemes for introduction of appropriate technologies and for Science & Technology Entrepreneurship Development have received due emphasis.

* Establishment of the North Eastern Space Application Centre at Umiam has been finalised and land and buildings made available within the MeSEB complex. The Indian Satellite Research Organisation which is sponsoring the Project have assured that the Centre will become functional within the next few months. 

* Proposals for establishment of the Bio-Resource Development Centre at Upper Shillong and a State Level  Science Museum has also been finalised in consultation with the Central Government and will be implemented  during 2000-2001.



* The strategy for future development of tourism in the State aims at generating facilities capable of attracting greater number of tourists from India and abroad. To achieve this goal, holiday package are being formulated and efforts  will be made for intensified marketing within the country and overseas

* The proposed holiday package will concentrate on adventure-tourism, trekking, caving, water sports, hand-gliding, rock-climbing, golf-tourism, eco-tourism and cultural-tourism.

* During the year 2000-2001, development of View Points in West Garo Hills, construction of boat-house with approach road at Tasek lake, construction of footpath near Duna falls at Moronggre, construction of View Point at Laitkynsew village in East Khasi Hills over-looking Bangladesh, construction of Yatri Nivas at Jowai and the construction of a Tourist Lodge at Nongstoin will be taken up.



The Public Distribution system will be further streamlined and strengthened. The operation of Fair Price Shops will be closely supervised and monitored to ensure that they serve the best public interest. Government have constituted the State Consumer Protection Council and set up Consumer Disputes Redressal Agencies at State and districts levels. 119 of the 441 cases registered by these forum  have already been disposed off.



 The ongoing  programme for providing grants-in-aid to the District Councils for construction of village roads,  footpaths, bridges, markets, water tanks, village playgrounds and Councils own Office Buildings, will continue. A provision of Rs.4.50 Crore has been mage  in the budget estimates for such purpose.



* Education has and will continue to receive the highest priority, with particular emphasis on elementary education.

* Presently, there are 4835 Primary Schools and 1041 Upper Primary Schools in the State. 24 percent of the habitats in the State do not yet have a primary School  within the normative distance of one kilometre.

* Over 35 percent of Primary Schools are located one-roomed buildings. Only 62 percent  of Primary Schools and 73 percent of Upper Primary Schools have permanent buildings.

* The ratio of Upper Primary: Primary Schools in the State is 1:5 as against an all-India level of 1:2.

* There are 10258 Primary Schools Teachers in the State giving a School Teacher ratio of 1:2.2 as against a norm of 1:3.

* Only 20 percent of Upper Primary Teachers and 43 percent of Primary Teachers have so far been trained.

* During the current year 3.10  lakh students were enrolled in  Primary Schools and 0.90 lakh students  in Upper Primary Schools, clearly reflecting a very high drop out rate of over 2 in 3, between the primary and upper -primary stages.

* Every efforts will be made during the year to address the shortfalls indicated, in a phased out time-bound manner.

* In the field  of technical education, two more Polytechnics will be set up at Tura  and Jowai. The only existing Polytechnic at Shillong will be strengthened during the year.

* During 1999-2000, opening-permission has been granted  to 16 new Higher Secondary Schools, 61 new Adhoc Secondary Schools and 6 new Colleges run by private bodies.

* The programme for supporting upgradation of educational facilities will continue. As many as 2770 Primary and Upper Primary Schools have been provided with Drinking Waster facility under the Tenth Finance Commission  Award. 400 more Schools, will be provided with similar facilities during 2000-2001.

* Steps are being taken to formulate a new Education Policy  for ensuring fuller responsibility and  accountability of Managing Committees and encouraging academic autonomy. The proposed policy will also rationalise the different categories of grants-in-aid to educational Institutions on a sustainable basis with reference  to ground, realities, besides suitable enhancement of the fee-structure which has not been realistically reviewed for decades.

* Arrangements are being made to ensure timely disbursal of salaries of teachers of Educational Institutions by stream-lining existing disbursal procedures.

* To achieve such objectives, the plan budget estimate provide an amount of Rs.43.30 Crores for this sector which accounts for 8.4 percent of the proposed plan-outlay.



* Phase-I of the State Cultural Complex at Rilbong, Shillong will be completed during 2000-2001. The construction of the District Museum-Cum-Cultural Complex  at Dakopgre, Tura will commence shortly. 

* To encourage promotion and preservation of traditional and customary art and culture, Grants-in-aid to skilled artisans, modellers and painters will be provided in the form of scholarship.

* An amount of Rs.3.00 Crores has been provided for the Art & Culture sector in the Budget Estimates.



* Seven Stadia and 92 Playgrounds were developed and established during the year. A scheme for providing monetary-award to prominent Sports' persons who excel at national and International Sport Meets has been introduced.

* The Second Phase of the Jawaharlal Nehru Sports Complex at Shillong was completed and commissioned during the year.

* The Shillong Government Boys Higher Secondary School football Team lifted the coveted Subroto Mukhrjee Football Cup, 1999.

* The implementation of the Intensive Sports and Youth Development programme will be accelerated.

* The plan budget estimates provide an amount of Rs.6.00 Crores for this sector during 2000-2001.



* Priority has been given for construction and upgradation of rural health infrastructure.

* Construction of two more Primary Health Centres  and seven more Community Health Centres will be completed during the current year.

* The upgradation of the Community Health Centres at Mairang and Williamnagar to Hundred-bedded Hospitals will be completed within the next few months.

* The ongoing upgradation of the NEC sponsored Orthopedic and Rehabilitation Centre at the Civil Hospital, Shillong  will benefit the people of the North Eastern Region, as a whole.

* Construction of new Out Patient Department and Nurses Hostel for the Ganesh Das Hospital, besides the new complex for the Meghalaya Institute for Mental Health  and Neurological Sciences is progressing satisfactorily, and will be completed during 20001-2002.

* An amount of Rs.35.90 Crores has been earmarked in the Budget Estimates of 2000-2001 for this sectors.



* Provision of safe drinking waster to all human habitations will continue to be taken up under the Basic Minimum Services Programme and the Accelerated Rural Water Supply Programme.

* Water Supply Quality Improvement Schemes are taken up as a Sub-Mission Programme. All Urban Centres in the State are provided with safe drinking water. To cater to the increased demand of water supply, implementation of augmentation schemes are in progress in Shillong, Jowai, Williamnagar, Nongstoin and Cherrapunjee. The Greater Shillong Water Supply Scheme is partially completed and 7.5 MGD of waster is supplied to Shillong Town and en-route villages, daily.

* The Mass Gravity Concrete Dam over river 'Umiew' in Mawphlang is under construction and is likely to be completed by 2002.

* Rs.44.84 Crores has been provided  in the Budget Estimates for 2000-01 for this sector.



* Construction of the parking lot opposite the premises of the Meghalaya Cooperative Apex Bank, Shillong has been completed. The construction of a Parking Lot near the District Council premises at Shillong is being initiated.

* To accommodate the increasing population  of Shillong, the new Shillong Township Projects, to be located at Mawdiangdiang has been finalised, covering an area of  approximately 2000 hectares. The Project estimated to cost around Rs.700.00 Crores is proposed to be financed from the Central Pool of Non-Lapsable Resources, term  loan from HUDCO and the State Plan. An area of 118.99 hectares has already been acquired in the first Phase.

* The Shillong Solid Waste Disposal Project to be located at Myrten has been sanctioned at a cost of Rs.4.07  Crores  and will be established  within 2000-2001, with funds from the Central Government, HUDCO  and the State Plan.

* An Electric Crematorium has also been sanctioned for Shillong and will be set up soon.

* Arrangements are being made for holding the Shillong Municipal Elections as per direction of the Hon'ble Supreme Court of India.

* An amount of Rs.38.50 Crores has been provided in the  Budget  Estimates for this Sector, as against Rs.9.25 Crores utilised during the current year.



* Like the SRWP in rural areas, this programme which is being implemented with the direct involvement of the beneficiary urban community has also generated sustainable community assets.

* Keeping in view the popularity of the programme and public response, fund allocation has been increased from Rs.18.00 lakhs to Rs.20.00 lakhs per urban MLA Constituency and from Rs.9.00 Lakhs to Rs.10.00 lakhs per semi-urban MLA Constituency, during  the current year. Budgetary provisions have been made to further increase this amount to Rs.25.00 lakhs and Rs.12.50 lakhs per urban and semi urban MLA Constituency, respectively, during the year 2000-2001.



In addition to the existing SUWP, the Chief Minister's Special  Urban Development Fund is being created for funding Schemes of critical public importance which may be identified by the Chief Minister in consultation with public representatives. Individual beneficiary will not bet eligible under the Scheme. These schemes will be implemented through the Municipalities or Municipal Boards as per Guidelines formulated in the Spirit of the SUWP guidelines.

An amount of Rs.1.00 Crore will be provided for  the programme during 2000-2001.



* The programmes under this sector will be designed to create better public awareness of the plans and programmes of the State, with a view to enlist enlightened public participation and to enable then to more fully avail of the opportunities available for economic development.

* A provision of Rs.1.81 Crores has been made in next year's plan Budget Estimates for this  sector, as compared to the expected utilisation of Rs.1.13 Crores during the current year.



* During the year 150 candidates attended the employment Coaching-cum-Guidance Centre at Shillong. The Centre will be strengthened.

* An Industrial Training Institute will be set up in South Garo Hills District to supplement the existing Institutes in other Districts of the State.



* The welfare of Women, Children, Physically-Handicapped, Juvenile Delinquents, the Aged and Infirm are the major programmes of this sector.

* Supplementary Nutrition Programme for Children and Expectant and Nursing Mothers will continue to be implemented  in all Community and Rural Development Block and Anganwadi Centres.

* The package of services provided under I.C.D.S. include non-formal education, nutrition, health checkup and referral services. Prosthetic aids, vocational training and scholarship are also made available to the physically handicapped.

*The programme for de-addiction and rehabilitation of drug addicts will be intensified. A new Observation-cum-Special Home for Boys is being established. It is also proposed to set up an Observation Home for Girls.

* The three Weaving Centres for Self Employment of Women at Shillong, Tura and Jowai will continue to impart training to women in weaving, tailoring and embroidery.

* Rs.2.00 Crores has been provided in the plan budget Estimates for this sector, including  Rs.1.00 Crore for the National Social Assistance Programme (NSAP) under which old-aged pension will be provided to eligible individuals who are above 65 years of age.



* With view to improve the effectiveness of the Police Force, all District Police Headquarters will be connected with State Headquarters on an on-line computer Network.

* The Central Government have recently agreed to reimburse all security related expenditure. Consequently, the budgetary provisions earmarked for this sector, earlier being used for such purpose, will now be available for upgradation of essential police infrastructure.

* Efforts will be made to supplement police housing within the budgeted provisions for the current year.

* The State Police force will continue to be modernised with the help of special Central assistance in the form of arms, ammunitions, vehicles and communication equipments.



*The construction of the New Meghalaya House at Calcutta will be completed during 2000-2001.

*With a view to provide accommodation  for the Staff of Meghalaya House, New Delhi, flats located at Dwarka have been purchased form the Delhi Development Authority.

*The Jowai Circuit House will be upgraded.

*Construction of a Second Meghalaya House at New Delhi on land allotted by the Central Government at Vasant Vihar will be undertaken.

*The projects for construction of buildings for the Governor's Guest House at Tura and the Mawshynrut Administrative Unit will also be taken up.

* The construction of the Yojana Bhavan at Shillong will also be completed within the coming year.



* Steps are being taken to set up a separate establishment for the promotion of Information Technology in the State.



The year 1998-99  opened with a deficit of Rs.44.34 Crores. While the total receipts during the year including receipts, under Public Accounts amounted to Rs.98.46 Crores, the corresponding expenditure was Rs.9838.45 Crores, resulting in a closing deficit of Rs.36.13 Crores.



The revised estimates for the current year reflects an opening  deficit of Rs.36.13 Crores. While the estimated receipts during the year including receipts  under Public Accounts is likely to amount  to Rs.5989.43 Crores,  the corresponding expenditure is expected to amount to Rs. 6095.76 Crores, resulting in an anticipated closing deficit of Rs.142.47 Crores.

However, with the downward revision of the Annual Plan outlay for 1999-2000 from the budgeted level of Rs.440.00 Crores to the level of Rs.350.00 Crores, the anticipated deficit will be compressed by a corresponding amount and is likely to stand at Rs.52.47 Crores.



The estimates envisage an opening deficit of Rs.142.47 Crores, which is likely to be compressed to Rs.52.47 Crores as a consequence of the aforesaid downward revision of the Annual Plan outlay for the current year.

The estimates envisage a total receipt including receipts under Public Account of Rs.6203.01 Crores against a corresponding expenditure of Rs.6422.15  Crores, resulting in an anticipated closing deficit of Rs.361.61 Crores. However, due to the likely compression of the opening deficit, as explained earlier, the closing budget deficit for the year 2000-01 is expected to be of the order of Rs.271.61 Crores.

This deficit  will be further compressed as a consequence of likely receipts by the State in excess of the budgeted amount in pursuance of the Eleventh Finance Commission Award, as an when made. The additional resources generated by continuing economy measures and the additional Taxation  proposals which I am about to make, will still further compress the closing deficit for the Year 2000-2001.




Keeping in view the increasing budgetary deficit of the State, as a consequence of increasing debt service burden and spiraling establishment cost, it is necessary for the State to generate additional resources to reduce the revenue gap. I therefore propose to give immediate effect to the under mentioned additional taxation measures.

(i) To increase the existing rate of Surcharge under Meghalaya Finance Sales Tax Act, the Meghalaya Sales Tax Act and the Meghalaya Purchase Tax Act, from 1 percent to 5 percent.

(ii) To increase the existing rate of Sales Tax on Motor Vehicles including motor car, omni buses, motor vans, trucks, chassis of motor vehicles, bodies on motor vehicles and all varieties of trailer, by whatever mane known from 3 percent to 4 percent.

(iii) To increase the existing rate of Sales Tax from 8 percent to 12 percent on.

(a) Collapsible gates, rolling shutters, whether operated manually, manually, mechanically or electrically, and their parts, grill made of iron and steel, water supply fittings and sanitary fittings including pipes of any type used for the purpose, doors windows, ventilators and other fixtures made of wood, plastic, alloy, aluminum, iron or steel.

(b) Tinned, packed or bottled food, cakes, biscuits, confectioneries, and provisions, butter, ghee, cream, and cheese, ice food, ice creams, tinned, packed or bottled  food, milk food and milk products but excluding fresh milk, spices in all forms including clove, dalchini, elachi, scentted supari, pan masala and zarda and the likes.

(c) Pre-stressed concrete poles, plywood including hardboard, card board, straw board and similar other boards, hume-pipes and their fittings, and other pipes and tubes not specified elsewhere.

(iv) To increase the rate of Sales Tax on Readymade Garments & Hosiery (Cotton, Synthetic and otherwise) excluding Schools Uniforms, from 4 percent to 8 percent.

(v) To increase the rate of Sales Tax on Dhup-Lakri, from 8 percent to 20 percent.

(vi) To increase the rate of Sales Tax on Paints, colours, lacquers, varnishes, including glue, polish, turpentine, thinners, putty, enamels and indigo, from 8 percent to 16 percent.

(vii) To increase the rate of Sales Tax on all types of furniture including sofa sets, dressing tables made of aluminum, iron and steel, including racks and part thereof  and moulded furniture, from 12 percent to 20 percent.

The aforesaid measures are expected to generate additional resources exceeding Rs.4.00 crores during the year 2000-2001.



 In conclusion, I beg Mr. Speaker, Sir, to submit that I would have been happier  if the fiscal realities of the State Economy had enabled me to present a more progressive and promising  Budget. It is my sincere hope and expectation that with the fullest support of all sections of this august House, the Budget proposals that I have presented, are effectively implemented, to generate conditions conducive to the peaceful and harmonious growth of the State economy, for fulfilling the rising expectations of the people of the State.

With these few words, I commend the Budget proposals for the consideration of this august House.




IRDP = Integrated Rural  Development Programme

TRYSEM = Training of Rural Youth for Self Employment

DWCRA = Development of Women and Children in Rural Areas.

SITRA = Supply of Improved Tools to Rural Artisans

GKY = Gram Kalyan Yojana

MWS = Million Wells Schemes

IAY  = Indira Awas Yojana

EAS = Employment Assurance Scheme

NSAP = National Social Assistance Programme

IFAD = International Fund for Agricultural Development.

GDP = Gross Domestic Product.

NSDP = Net State Domestic Product.