Government of Meghalaya

Budget Speech

1999 2000


Shri A. H. Scott Lyngdoh

Finance Minister, Meghalaya

30th March, 1999



       Mr. Speaker Sir, I rise to present the First Budget of this Government. This budget for the financial year 1999-2000 covers the third year of the Ninth Five Year Plan and the last year of the Award of the Tenth Finance Commission.



 While presenting the Union Budget 1999-2000 in Parliament , Union Finance Minister indicated that despite the slump in World growth output and the hostile economic environment, India's Gross Domestic Product registered a growth of 5.8% in 1998-99 compared to 5.0% during the previous year. This was primarily because of the turnaround in agriculture and allied sectors, which registered a growth of 5.3%. The only other major sector showing better results was the trade, hotel, transport and communications sector, which recorded an improvement from 5.7% in 1997-98 to 6.8% in 1998-99. The inflation rate dropped steeply to below 5% in January'99 from an estimated peak of 8.8% in late September '98. However, the average  inflation rate for the whole of 1998-99 would be higher than the 4.8% registered in 1997-98. The fiscal deficit as a proportion of GDP at current prices is now placed at 5.5% for 1997-98 and 5.1% for 1998-99. On the other hand, there has been a marked decline in the industrial growth rate recorded at 3.5% for the period April-December 1998 as against 6.7% during the corresponding period of 1997.


 The Union Budget for 1999-2000 provides for a 10 years tax holiday to all industrial units set up in the Growth Centres and other specified areas,  reflecting the concern shown by the Central  Government about the slow pace of industrialization in the North -East. The announcement by the Union Finance Minister in his Budget Speech that the Centre had released funds from the Non-Lapsable Pool of Funds for the North-East is another welcome step. The State Government helps that the Prime Minister's assurance of "reforming the reforms' will include within its ambit the special developmental needs of Meghalaya.



The Gross State Domestic Product, (GSDP), at current prices, is estimated at Rs. 2222.19 crores in 1997-98  compared to Rs. 2032.92 crores  in 1996-97 showing a growth of 9.3%.  Though the State  is predominantly rural with 81.5% of the population living  in the villages, the contribution of the primary sector to the GSDP was only 25.52% in 1997-98. The secondary sector accounted for 17.25% while  the tertiary sector recorded a contribution of 57.23% during the period . The per capita income is estimated at Rs. 10384 in 1997-98 as compared to Rs. 9774 in 1996-97, at current  prices, indicating a 6.24% increase. However, the pace of development of the State's  Economy would have been faster but for the Supreme Court ban on felling and transportation  of timber which caused a sudden  loss of  employment to many people, mainly in the rural areas, so much so that the economic activities suffered a setback due to the consequent reduction in the purchasing power of the people. Simultaneously, the export of coal to Bangladesh and to other States in India got scaled down due to the deteriorating road conditions of the Jowai-Amlarem-Dawki road and the Nangalbibra-Baghmara-Dalu-Gasuapara road coupled with market fluctuations. The output of coal and limestone  also suffered reduction in 1997-98 as compared to 1996-97. The cascading impact of these developments on the State economy can well be imagined. On the other hand, the employment scenario continues  to be worrisome with growing unemployment, especially among the educated youth. Overall the State's economy shared the recessionary trends of the national economy.



As the Hon'ble members are aware, Meghalaya has been included as a Special Category State since its formation in 1972. This implies recognition that at the time of its formation the State was not financially viable due to its remoteness, difficult terrain and lower economic activity, thus requiring assistance and nurture through special central  subventions for a number of years. The financial  problems of the Special  Category6 States really started  in 1989 when the filling up of the non-plan needs through Central Assistance was discontinued due to strains on the Centre's resources. The State Government, with a  view to keep its finances on an even keel, has adopted specific measures such as additional resource mobilization, compression of relatively  non-essential expenditure and tight control over the Ways  and Means position. since the grants-in-aid under Article 275 are not sufficient by themselves to take care of the increasing non-plan gap because of their inflexibility, the State Government is finding it difficult to balance its budget. Further the inelastic resource position and ever increasing expenditure fueled by inflationary pressures as also the security  related problems aggravate the malaise. I must add that similar position obtains in other States of the N.E. Region, due to these structural imbalances.


 Another way of explaining the matter is that the present state of affairs has arisen due to the cumulative effect of the annual deficits which could not be covered owning to over assessment  of receipts and under assessment  of expenditure by successive Finance Commissions. The State Government has put forth the above issue strongly before the Eleventh Finance  Commission  and I am hopeful that some durable solution will emerge. In the meantime, we have put in place the LOA/LOC system, covering  major Departments to minimize any mismatch between the State's Receipts and Expenditure and have further tightened the expenditure control mechanism to reduce comparatively low priority outgo of funds. For plan expenditure, in particular, the departments were requested to prioritize their schemes and projects so that fund constraints do not effect the vital ones adversely. We also intend to have a thorough study of the State Finance as would identify short and long term measures necessary to remove various structural imbalances.



There are four major receipt sources; namely, tax and non-tax revenue of the State Government, devolution of funds from the Central Government as  a result of the Award of the Finance Commission, Central Assistance for Plan Expenditure and various loans availed by the State Government.


In view of the mismatch between the receipts and expenditure, additional resource mobilization  efforts need to be stepped  up. During 1998-99, the rate of taxes of Motor Vehicles sales of goods, petroleum products etc as also the excise duty were enhanced. Measures were put in force to broaden  the tax base, plug the loopholes, increase the efficiency of tax collection and reduce the arrears. Similar measures were also undertaken in regard to the non-tax revenue, such as royalties and user charges. In the year to come, these  measures will be continued and intensified to garner more revenue. At the same time, the tax rates of neighboring  States  will also  be monitored and if need be, our tax rates suitably calibrated, to avoid any tax war as also unintentional tax advantage to business men and traders on the one hand and hardship to consumers on the other. 


At present, the State's share of Central Taxes is governed by the Award of the Tenth Finance  Commission and depends basically on the buoyancy of certain Central Taxes, which was  somewhat low last year. The Tenth  Finance Commission had given an Alternative Scheme of Devolution of Taxes in lieu of their Award, which is more favourable and equitable to the  States. Since  this requires  a Constitutional Amendment, the matter was duly taken up in Parliament. It is expected that the aforesaid Amendment may be affected shortly and during 1999-2000, the State may get a higher devolution as the share of Central Taxes.


Due to unavoidable reasons, discussion with the Planning commission to finalize the Annual Plan for 1999-2000, could not be held and hence the Budget Estimates anticipate a plan size of Rs. 440 crores. Keeping in mind the developmental requirements  of the State suitable submissions  will be made before the Planning Commission.


With the liberalization of the national economy, the Commercial Banks and Financial Institutions are gradually being freed from the RBI and Central Government control. In the coming years, the States will be given credit rating when trying to raise loans. I am hopeful, however, that with the quality of our financial management and track record the State Government may not have any problems in raising loans reflected in the Budget Estimates.


 Actually there should have been a fifth major source of revenue receipt, namely returns from investments made by  the State Government in various Public Sector Undertakings, Cooperative Societies etc. Unfortunately, in common with the  situation obtaining in all the States, there is no yield as interest  or dividends from most of the investments. The State Government cannot obviously let this situation continue and some kind of a holistic solution has to be found to convert these organizations into economically viable entities within a determined time frame. It is true that most of them are either promotional or subserve overall social interest  but economic imperatives also have their own importance and these two need to be balanced harmoniously.



 Mr. Speaker Sir, under your able leadership, the Committee  System of examining  Budget Estimates  is being adopted for the first time in the Meghalaya Legislative Assembly, in which the Estimates of various Departments will be discussed and scrutinized by the Committees set up for this purpose and  thereafter in the reconvened Budget Session discussions will take place. I have every expectation that this new System will lead to a better evaluation of the Budget Estimates as also the plan and schemes of various Departments by the House. In view of these developments, I am taking the liberty of giving a summarized account of activities of Government Departments.



As the Hon'ble members are aware, the non-plan expenditure covers salaries and allowances, offices expenses, travel expenses, maintenance expenses, repayment of  principal and interest and so on. It is non-plan expenditure that keeps the Government machinery running. During the last few years, non-plan expenditure, except for salaries and payment of principal and interest, has been compressed right from the stage of farming of the Budget  till the end of the financial  year. This process has to continue for the year 1999-2000. I wish there were alternatives other than this. With inflationary pressures the salary burden is growing  and as a result other expenditures are likely to suffer. Even then all attempts would be made to ensure that critical segments of expenditure are protected and the necessary expenditure compression is done on a rational basis.



 The approved outlay for the State under the Ninth Five Year Plan is Rs. 2500.62 crores. The expenditure during 1997-98 , the first year of the Plan was Rs. 248.83 crores. The original Annual Plan Outlay for 1998-99 was Rs. 400.00 crores. However, since  the Institutional Loans and Externally Aided Funds, as originally  envisaged in the Plan, have not been forthcoming, due to reasons largely out of the control of the State Government, the revised outlay is likely to be to the tune of Rs. 300 crores. Pending finalization of the Annual Plan for 1999-2000, a tentative outlay of Rs. 440.00 crores has been projected. Details of the final outlay will therefore be circulated later.




Militancy is taking roots in the State, and activities perpetrated through extortion, kidnapping, looting and murder are on the rise. The Police Department needs to be transformed into a well-trained crack force with modern equipment and adequate support systems for more efficient and effective policing. Inspite of obvious limitations, every effort has been made to ensure peace and security throughout the State. The Police operations against militancy have stretched our resources to the limit and experience indicates that the police force is lacking in firepower and modern equipment. Due to resource constraints, the  department had to forego some of its unavoidable requirements, but continued in its efforts to maintain social harmony and prevent any breach of the peace. Despite the resource crunch, security  concerns will not be compromised and the  requirements of the Police Department will continue to receive due priority.

Agriculture and allied sectors


Agriculture  is a major sector of the State's economy contributing about 24% to the Net State Domestic Product. However, the practice  of shifting cultivation as also lack of adequate processing, marketing and transportation facilities are preventing realization of its vast potentialities. Our target of foodgrains production for 1998-99 is 2.05 lakh MT  as against the productin of 1.93 lakh MT in 1997-98 . The target of production for 1999-2000 is 2.17 lakh MT. Due emphasis has been given to develop commercial crops and Horticulture and this emphasis will continue. The National Watershed Development  Project for Rainfed  Areas (NWDPRA)  was implemented in eight projects in the State from 1990-91 to 1997-98 covering an area of 4000 hectares at the cost of Rs. 215.55 lakhs. I am happy to say that the Maweit Micro Watershed, Nongstoin Block was awarded the Certificate of Merit  for 1996-97 by the National Productivity Council, Government of India, recently.


 The State's progress in agricultural production, however, continues to be handicapped mainly due to large scale  shifting cultivation. The total area under  Jhumming is estimated to be around 63,280 hectares. Jhum control, Watershed Management and afforestation of degraded lands are among the major schemes taken up by the Soil Conservation Department to undo the depletion of vital natural resources  and turn around the villages towards achieving sustained food production, generating employment and adopting improved techniques for ensuring food security. While these programmes will continue in 1999-2000, inclusion  of new programmes like the valley approach of Soil and Water conservation, reclamation of lands degraded by mining activities and water management  including  water harvesting will provide an added impetus for development and conservation of our natural resources in 1999-2000


 Development of Pisciculture will be further emphasized during the next financial  year. Among the major achievements, is the development of the reservoirs at Kyrdemkulai and Nongmahir in Ri Bhoi District for fish production. During 1999-2000, the development of the Khandong Reservoir at Kupli and the Umiam Reservoir is also proposed to be taken up.


The Animal Husbandry & Veterinary Sector holds great potential for transforming the rural economy. To generate additional employment incentives in the form of subsidy  are given for implementing of Dairy, Piggery & Poultry Schemes to the farmers and for Dairy Farming, broiler Production & Piggery Production to the educated unemployed youth. All these Schemes will continue during  1999-2000.


The growth of the cooperative Movement is expected to play a catalytic role in promoting agriculture and allied activities. The Meghalaya Cooperative Apex Bank has been able to maintain the highest Credit Deposit Ratio of about 38% compared to other Banks in  the State. The main thrust of the Department during 1999-2000 will be directed towards revitalizating the Cooperatives in priority areas  along with strengthening cooperative training and education.


The endeavours of the Forest Department to augment the forest wealth of the State have brought an additional 1167 hectares under forest cover. The Department  intends to bring more barren degraded areas under the ambit of the Social Forestry Schemes. Following the order of the Hon'ble Supreme Court, the Meghalaya Forest Regulation has been amended to regulate the establishment and location of Saw Mills/Veneer Mills and Plywood factories in the State. On Wildlife Conservation front, the endeavour has been to improve the extent and quality of protected habitats in the State. Measures for protection of reserve forests, including preparation and implementation of working plans, would be geared up further.

Social Services


The main social objective of the Government is to provide minimum basic amenities including education and health care to all sections of the society. Thus imparting education in the truest sense will receive high priority. Upgradation of infrastructure, provision of minimum basic amenities , proper training of  teachers and coverage of remote areas will form part of these endeavours. Due emphasis has been given to Universal Primary Education for which suitable provision has been made under the Basic Minimum Service  Component for 1999-2000. Traditionally, Government  efforts in providing education have been complemented by non-government  organizations, so much so that the teachers of aided educational institutions get the same salary as Government teachers. Inspite of financial constraints, benefits of the revised  pay scale were extended to such teachers last year. As far as arrears are concerned, only twenty five percent could be paid so far and I am hopeful that next year the Government will be able to disburse the rest. All possible efforts to improve the working conditions of teachers will be made inspite of financial and other difficulties.


 The main thrust of the Sports &  Youth Affairs Department is to develop sports infrastructure , identify and nurture talent and organize sports' meets. An important programme is the Chief Minister's Youth Development  Scheme. To encourage sports persons in their respective disciplined, the  Department has drawn up a Scheme of providing of monetary awards to prominent sports persons excelling at the National and International levels. Of the thirty seven ongoing infrastructural projects throughout the State, the construction of the second Phase of the Jawaharlal Nehru Sports complex is the most prominent.


As part of the National Policy to preserve, promote and protect the cultural heritage, appropriate steps are being taken to provide the required infrastructure. Construction of the State Cultural complex at Rilbong, Shillong is in progress. The construction of the District Museum -Cum -Cultural  Complex at Dapokgre, Tura is expected to commence shortly. Grants-in-aid to skilled artisans, modelers and painters will be provided in the form of a Scholarship to encourage such entrepreneurs.


In line with the top priority accorded to health and family welfare, emphasis is on the upgradation, expansion and consolidation of health infrastructure. Construction of four Community Health Centres, sixteen Primary Health Centres and three Health Sub-Centre is likely to be completed during 1998-99. AIDS  Control and Blood Safety are high on the priority list. The recently initiated Reproductive and Child Health Programme, funded by the World Bank is another major Project.


Provision of safe drinking waster is a basic necessity. Rural Water Supply schemes are  taken up in the State Sector under the Basic Minimum Services and in the Central Sector under the Accelerated Rural Water Supply Programme (ARWSP). Of  8,639 habitations in the State, as on 1st April 1998, Water Supply has been provided in some form to 7629 habitations. The Umiew  Dam at Mawphlang costing Rs. 33 crores is likely to be completed by 2002. As regards improving the Greater  Shillong Distribution System, already work has been completed in four zones, covering  Police Bazar, Mawprem, Mawkhar, Jaiaw, Mawlai and Laitumkhrah, localities. The work is in progress in two zones, covering Nongthymmai and Laban areas, and is expected to be completed by October 1999. The work in the remaining three zones, covering Secretariat Hill, Lachumiere, Malki-Dhankheti and Pasteur Institute-Polo area will be taken up thereafter.


Following the policies enunciated in the International Year of Shelter for the Houseless in 1987, the State Government  adopted the State Housing Policy on 29.4.88 to accord special thrust to the economically weaker sections and Low Income Group of houseless  people, especially in the rural areas. Grants-in-aid under the Basic Minimum Services programme of Rural housing Scheme have also been provided to very poor rural houseless citizens  who are willing to construct their houses upto the roof level with their own resources.


As part of our strategy to alleviate the problems faced by the weaker sections of the society , new schemes in the form of Book grant and uniform allowance to 200 students, conveyance allowance to 100 disable students, unemployment allowance to 50 disabled, persons as also  provision of identity-cards, to the disabled as envisaged in the persons with  Disabilities  Act 1995 are proposed to be  introduced during 1999-2000. In addition, the two new ICDS projects at Ranikor and  Tikrikilla will be made fully operational in 1999-2000.  The proposed coverage under the Supplementary Nutrition Programme in 32  ICDS  Projects during the next financial year will be 96,829 children and 14,433 pregnant and nursing mothers. Ten orphan, destitute and single-parent girls  have  been sponsored to undergo training in  "Computer Operator and Programming Assistant" at APTECH' Shillong for  a period of one year, as an experimental venture.


 Government is paying due attention to urban areas problems like traffic congestion  and  slums as also provision of various civic amenities. Construction of the Parking Lot opposite Apex Bank  Ltd., Shillong is being  completed and the work for construction of a Parking Lot near the District Council premises at Shillong will soon be initiated. The New Shillong Township  Project is in progress and the rough estimate for laying the Town Infrastructure is around Rs. 650 crores. Other urban  areas of the State will also  be given due priority in the Schemes of the Urban Areas  Department. Schemes  of the for providing the desired level of civic amenities  and infrastructure  like  approach  roads, footpaths, drains and shopping centres are being implemented within the jurisdiction  of the Municipalities/Town Committees. The civic amenities provided are maintained by the Municipal Boards. Government will continue to provide assistance to the Municipalities/Town committees in the interest of better civic administration.

Rural Development and Special Areas Programme


1. With 81.5% of our population living in the rural areas and a 423 Km  international border, the importance attached to the development of the rural and border areas hardly needs emphasis. Programmes  of national importance like the Jawahar Rozgar Yojana, Employment Assurance  Schemes,  Integrated Rural Development Programmes and National Social Assistance Programmes are being implemented. These programmes aim  at arresting the trends of disguised and seasonal unemployment  besides effectively combating poverty in the rural areas. Special  Rural Works programmes and construction of Rural Roads have been taken up in earnest under the State Sector.


2. The  Government is committed to improving the economic condition of the people residing in the areas bordering Bangladesh. To ameliorate the hardships faced by these people, several schemes have been taken up through different departments aimed at bringing parity in the quality of life to  the entire populace of the State. The achievements in this regard have been encouraging. To encourage the pursuit of education, it is proposed  to cover upto 20,000 students hailing from Border Areas under the scholarship scheme during 1999-2000. Besides this, a substantial amount  has been projected under Horticulture, Soil Conservation  and Road programmes. An innovative Scheme, proposed to be extended  next year, is single-span Rope Ways. This Schemes besides being cost effective is expected to effectively link remote villages with the rest of the State.

Transport and Communication


1. Government attaches great importance to the development  of roads and efficient management of the transport service in the State. The State has a total road length of 6817 kms. And a road density of 30.39 Km per 100  Sq. Km., which is below the prescribed norms of 40 Km. Per 100 Sq. Km. for hill areas. Already, due to the initiative taken by the State Government, tow roads, Jowai-Amlarem-Dawki road and Baghmara-Dalu road, have been declared as National Highways with all the beneficial  consequences. The Shillong By-pass Project has been posed to the Central  Government for approval and NEC has agreed to make available requisite funds for reconstruction of bridges on Shillong-Nongstoin -Tura State Highway. These efforts would be continued  in the next year. In addition, improved  specification of road paving like bituminous macadam and asphalt concrete is being adopted on important roads and modern machinery will be used to achieve better quality of works.


2. Government is well aware of the need to further improve rural infrastructure by means of adequate connectivity and through development and construction of roads in the rural areas. Accordingly, Rs. 9.33 crores as loan has been sanctioned under NABARD's "Rural Infrastructure Development Fund" for implementation of 16 projects during 1999-2000.


 Government has adopted a liberal policy in the matter  of issuing  road permits  to applicants desirous of operating transport services. This reflects the concern to provide adequate transport services to every part of the State. Consequently, practically all major  villages connected with roads have had the benefit of road transport services. Side by side, the Meghalaya  Transport corporation has also been providing transport services particularly to those areas  where private operators do not venture because of low occupancy ratio  and the resultant uneconomic returns. To further encourage the educated SC/ST youths to go in for road transport services as a means of self employment, the State Government is examining the possibility  of increasing the amount of subsidy for purchase of chassis for buses, taxis and three wheelers,  with credit linkages.


In  order to open up alternative modes of transport, the State Government has been successful in re-introducing the helicopter service with effect from 15.2.99. The Union Ministry of Home Affairs has agreed to a 75% subsidize for this helicopter service. The Central Government has been requested to provide Rs. 35 crores from the Central "Non-lapsable Pool" of Funds for upgradation of Umroi Airport. Consruction of Baljek Airport is also going on apace with an amount of Rs. 7.00 crores having been released  to the Airport Authority of India and the balance  of Rs. 5.21 crores been sought for from  the "Non-lapsable Pool". The Government has also taken up with the Railway Authorities to expedite the Survey linking New Guwahati with Byrnihat via Narangi.

Industry and Minerals 


The thrust areas, as outlined in the Industrial Policy, include generation of employment opportunities, improving marketable skills and promotion of need based industries. Thirty seven industrial projects in the private  sector with an employment potential of about  2000  persons have been approved. The Export Promotion Industrial Park at Byrnihat is expected to be completed within the current year. The Growth Centre at Mendipathar involving a project cost of Rs. 20.00 crores will commence operations during  1999-2000


Sericulture & Handloom Weaving plays an important economic role in many rural households. An ambitious target of producing 39.61 lakhs silk worm seeds, 112.56 lakhs muga cocoons, 3.71 lakhs kilograms mulberry/eri cocoons and 5380 Kilograms of raw silk/hand spun yarn has been projected  for 1999-2000. The "Integrated Development of Muga Seeds" is also being taken up with the NEC  funding  under the Handloom sector. Efforts are on to  increase productivity by providing training facilities to upgrade weavers skills on improved looms having higher rate of output. Implementation of the Entrepreneurship Development Training Programme sector through awareness and motivation programmes to help the unemployed youth will be further accelerated in 1999-2000.


The State's endeavour to tap the rich mineral resources of the State for the overall development of the economy continues. In 1999-2000 , the Department of   Mining  &  Geology will take up investigation of quartz, feldspar and iron -ore in addition to existing Schemes concerning coal, limestone, granite, ground water and geo-technical studies.



The power generation by the Meghalaya State Electricity Board touched 6.30 lakhs mega watt hours in the year 1998, showing an increase of about 5%  over 1997. This figure and indeed the present  installed capacity is but a fraction of the power generation potential of the State. A number of projects are on the anvil, the major ones being Leishka Hydro Electric Project  in Jaintia Hills and Nangalbibra Thermal Project in South Garo Hills District. The government is according  due priority to implementation  of these projects. An important Schemes of MSEB; the renovation work of Umiam Stage I Power Station, has been finalized through OECF funding at an estimated cost of 2047 million  yen or Rs. 65.00 crores. The Board is also going ahead with augmentation of the 132 KV  Rongkhon Sub-station  at Tura during 1999-2000. commissioning of one  132/33 KV 5 MVA Transformer at Rongkhon Sub-station  and part MVA augmentation at 132 KV  Mawlai Grid Sub-Station will also  be taken up during the year. The NEC  Scheme for construction of 132 KV Nangalbibra-Agia (Assam) single-circuit line covering a distance of 110 KM under the 9th Plan is also proposed to be started during 1999-2000.


Our endeavour to harness alternative and non-conventional sources of energy is continuing, though on a limited scale. Installation  of three  100 KW Micro Hydel Projects at Galwang in West Garo Hills; Rongap in East Garo Hills and Umlieh in Ri- Bhoi Districts is being taken up. Five portable Micro Hydel Schemes  are expected to be completed soon. Solar Photo-voltaic Pack of 1 KW capacity is being installed as a possible substitute for conventional rural electrification. The Regional Institute  of Integrated Rural Energy Planning and Development at Shillong is  expected to become operational during 1999-2000 and the Government of India has already agreed to bear 90% of both the capital and recurring costs of this Projects.

General Economic Services


Tourism Sector promises utilization of the employment potential in the State besides enjoying a unique position as a pollution-free industry. We will continue to accord priority to tourism development particularly  in the field of developing tourism  infrastructure and  tourist spots. In order to involve  the people of the State more actively in tourism development,  Government is examining the privatization of some projects. This will ensure that the benefits of development  percolate down to the grass root level. During the current financial year, Government of India has prioritized a number of projects submitted by the State Government amounting to over Rs. 2.30 crores. These include  the proposals for creation of basic tourism infrastructure. The sanctioned projects for construction of Tourist Bungalows at Williamnagar and Nongstoin will be implemented during 1999-2000.


The Government has been  providing grants-in-aid to the District Councils for construction of village roads, footpaths, bridges, markets, water tanks, village playgrounds and Councils own offices. These grants will continue during 1999-2000


Rice, wheat and levy sugar are distributed to the consumers through a network of Fair Price Shops in both the urban and rural areas. Kerosene oil is distributed both by the agents appointed by Oil Companies  and the sub-agents appointed by Deputy Commissioners and Sub-Divisional  Officers. Under the mobile shop scheme, fourteen vans are operating as mobile shops for distribution of essential commodities in the interior areas of the State. The State Consumer Protection Council constituted in 1989 under the Consumer Protection Act 1986 has been functioning  effectively. Of seventy Registered  cases, forty three have been disposed of. Besides the District fora in all the seven Districts are also functioning satisfactorily having disposed of one hundred seventy six cases out of two hundred twenty cases registered. The above efforts would be strengthened further in  the next year.



As Honourable Members are aware, the Eleventh Finance Commission  was constituted by a presidential notification on 3rd July 1998. The terms of reference  entrusted to the Commission, which encompasses both Plan and non-Plan revenue expenditure, are much wider than earlier Commissions. It has also to review and suggest  measures to restructure Central and State Finances. Other important aspects under the purview of the commission concern finances of the District councils and the Municipalities, requirement of the State for upgradation of standards and incentives for better realization of tax and non-tax revenue. The present Finance Commission is to submit its recommendations on or before 31st December 1999.


In view of the importance of the recommendations of the Commission, which will decide the future development of the State; special  efforts were made by all Government Departments to ensure submission of the required data within the stipulated period. The State Government has submitted a Memorandum containing its views on the terms of reference of the Commission together with two Supplementary Memoranda on Upgradation of Administration and on  use of Information Technology. The Commission, which visited the State between 17th to 20  March 1999, had  useful discussions with the Chief Minister and  his Cabinet colleagues, senior officials, the Chamber of Commerce, Employees Federation, District Councils and prominent personalities. Field visits were also arranged to enable the Commission to apprise  themselves of ground  realities   in Meghalaya.  There is every expectation that the Commission would pay due consideration  to the proposals  of the  State Government and that its recommendations will usher in the new Millennium with much more healthier State finances. 



 Government has decided on almost all the recommendations of the Third Pay Commission. An Anomalies committee has been set up to go into the remaining issues. An Hon'ble  members may be aware, due to fund constraints, there was a long pending list of employees awaiting grant of House  Building Advance and even between one installment and the other there were delays. To take care of the housing problems of Government employees, a loan of Rs. 50 crores has been availed of from HUDCO. This is expected to cover all the pending applications for House Building Advance and increase the satisfaction level amongst employees.



 The multi-faceted potential of the Information  Technology in transforming Government functioning  needs no elaboration and through its means Meghalaya can leap-grog intervening stages of administrative development and reach the level of the advance States of the country, with minimum expenditure. The Government functioning  becomes more responsive and transparent with obvious benefits to the citizens of the State. Due priority will be given by all Departments  to this sector and fund constraints would not allowed to be a hurdle.

ACTUALS  1997-98


 During 1997-98 the receipts were Rs. 96,67.87 crores  and expenditure was Rs. 96,53.03  crores, the surplus being Rs. 14.53 crores. This surplus reduced the negative opening cash balance of Rs. 59.18 crores to Rs. 44.34 crores. However, at the end of the year the State Government investment in Government of India Treasury Bills amounted to Rs.68.14 crores.



The year 1998-99 opened with negative cash balance of Rs. 44.34 crores. The total receipts for the year are estimated at Rs. 52,98.05 crores and the expenditure at Rs. 53,18.05  crores leaving a deficit of Rs. 20.00 crores. However, the impact  of expenditure control measures will be known by Aapril'99



the year 1999-2000 is expected to open with a deficit of Rs. 64.35 crores. During this year, as detailed in the budget documents circulated, the revenue receipts have been estimated at Rs. 10,18.18 crores and the revenue expenditure at Rs. 10,75.72 crores; leading to deficit of Rs. 57.54 crores. Outside the revenue account, the estimated receipts are Rs. 45,55.11 crores and expenditure Rs. 46.46.55 crores, leading to a deficit of Rs. 91.44  crores. Taking all accounts together the deficit works out to Rs. 148.98 crores. Taking into account the opening cash balance of Rs. 64.35 crores, the year is estimated to close with deficit of Rs. 213.33 crores, therefore.


Mr. Speaker, Sir, since the best intentions of even a Finance Minister have to be moderated by fiscal realities, the budget presented by me is not the ideal one. However, I am confident that with support of all sections of the House, we  would be able to make a beginning in the new millennium towards a rich, prosperous and peaceful Meghalaya, thus fulfilling  the hopes and aspirations of the people. With these words, I commend the budget to this August House.