The Chief Minister of Meghalaya, Mr. Conrad K Sangma, presented the Budget for the state for the financial year 2024-25 on February 21, 2024.

Budget Highlights

  • The Gross State Domestic Product (GSDP) of Meghalaya for 2024-25 (at current prices) is projected to be Rs 52,974 crore, amounting to a growth of 11.8% over 2023-24.

  • Expenditure (excluding debt repayment) in 2024-25 is estimated to be Rs 25,574 crore, an increase of 6.3% over the revised estimates of 2023-24.  In addition, debt of Rs 1,498 crore will be repaid by the state.

  • Receipts (excluding borrowings) for 2024-25 are estimated to be Rs 23,545 crore, an increase of 6% as compared to the revised estimate of 2023-24.

  • Revenue surplus in 2024-25 is estimated to be 7.3% of GSDP (Rs 3,862 crore), lower than the revised estimate for 2023-24 (8.2% of GSDP).  In 2023-24, the revenue surplus is expected to be higher than the budget estimate (4.8% of GSDP).

  • Fiscal deficit for 2024-25 is targeted at 3.8% of GSDP (Rs 2,029 crore).   In 2023-24, as per the revised estimates, fiscal deficit is expected to be 3.9% of GSDP, higher than the budget estimate for 2024-25 (3.4%).

Policy Highlights

  • Encouraging investment:  The state will create an Invest Meghalaya Authority, which will be empowered to undertake all investment promotion and facilitation activities.  

  • Health infrastructure:  A comprehensive, three-year mission will be launched to revamp all health facilities in the state.  An investment of Rs 500 crore will be allocated towards this.   

  • Infrastructure for tourism:  A new scheme will be launched for the development of infrastructure at all tourism spots.  Communities managing tourist sites will be provided grants up to Rs 25 lakh.

  • Eco-Tourism framework:  A framework to notify eco-tourism zones will be created.  The zones will have a defined capacity and charge a higher ‘green fee’ from tourists, which will be disbursed amongst residents.

Meghalaya’s Economy

  • GSDP:  In 2022-23, Meghalaya’s GSDP (at constant prices) grew at 3.9%.  In comparison, national GDP grew at 7.3% in 2022-23.

  • In 2023-24, agriculture, manufacturing, and services sectors are estimated to contribute 23%, 18%, and 59% to the economy, respectively (at current prices).

  • Per capita GSDP:  The per capita GSDP of Meghalaya in 2023-24 (at current prices) is estimated at Rs 1,39,602, an increase of 10% over 2022-23.

  • Unemployment:  As per the Periodic Labour Force Survey (June 2022-July 2023), the unemployment rate in Meghalaya was 6%, higher than the national average of 3.2%.  Unemployment in urban areas (12.3%), was much higher than the national average of 5.4%.

Figure  1 : Growth in GSDP and sectors in Meghalaya at constant prices (2011-12)


Note: Agriculture includes mining and quarrying; Manufacturing includes construction and electricity.  These numbers are as per constant prices (2011-12) which implies that the growth rate is adjusted for inflation.
Sources: Meghalaya FRBM Statement 2023-24; PRS.

Budget Estimates for 2024-25

  • Total expenditure (excluding debt repayment) in 2024-25 is targeted at Rs 25,574 crore.  This is an increase of 6% over the revised estimate for 2023-24.   This expenditure is proposed to be met through receipts (excluding borrowings) of Rs 23,545 crore and net borrowings of Rs 2,029 crore.  Total receipts for 2024-25 (other than borrowings) are expected to register an increase of 6% over the revised estimate for 2023-24.

  • Revenue surplus in 2024-25 is estimated to be 7.3% of GSDP (Rs 3,862 crore), decrease from the revised estimate for 2023-24 (8.2% of GSDP).  The revenue surplus is mainly owing to central transfers.  Fiscal deficit for 2024-25 is targeted at 3.8% of GSDP (Rs 2,029 crore), marginal decrease from the revised estimate for 2023-24 (3.9% of GSDP).  

Table  1 : Budget 2024-25 - Key figures (in Rs crore)

Items

2022-23 Actuals

2023-24 Budgeted

2023-24 Revised

% change from BE 23-24 to RE 23-24

2024-25 Budgeted

% change from RE 23-24 to BE 24-25

Total Expenditure

21,390

22,022

25,052

13.8%

27,072

8%

(-) Repayment of debt

3,750

988

988

0.0%

1,498

52%

Net Expenditure (E)

17,641

21,034

24,064

14.4%

25,574

6%

Total Receipts

21,065

21,781

24,173

11.0%

27,072

12%

(-) Borrowings

6,221

2,339

1,957

-16.3%

3,527

80%

Net Receipts (R)

14,844

19,442

22,216

14.3%

23,545

6%

Fiscal Deficit (E-R)

2,796

1,592

1,849

16.1%

2,029

10%

as % of GSDP

6.5%

3.4%

3.9%

 

3.8%

 

Revenue Balance

-44

2,228

3,894

74.7%

3,862

-1%

as % of GSDP

-0.1%

4.8%

8.2%

 

7.3%

 

Primary Deficit

1,768

424

680

60.5%

793

17%

as % of GSDP

4.1%

0.9%

1.4%

 

1.5%

 

GSDP

42,697

46,600

47,381

1.7%

52,974

12%

Note: BE is Budget Estimates; RE is Revised Estimates.  Negative sign (-) indicates a revenue deficit.
Revenue Balance for 2024-25 differs from that in the FRBM statement.  The FRBM statement’s estimation of revenue expenditure is Rs 170 crore higher than that in the Annual Financial Statement.
Sources: Annual Financial Statement, Meghalaya Budget 2024-25; PRS.

Expenditure in 2024-25

  • Revenue expenditure for 2024-25 is proposed to be Rs 19,653 crore, an increase of 7% over the revised estimate of 2023-24.  This includes the expenditure on salaries, pensions, interest, grants, and subsidies.

  • Capital outlay for 2024-25 is proposed to be Rs 5,870 crore, an increase of 3% over the revised estimates of 2023-24.  Capital outlay indicates the expenditure towards creation of assets.

  • In 2023-24, at the revised stage, capital outlay is estimated to be 50% higher (Rs 1,908 crore higher) than the budget estimates.     Key areas where capital outlay is estimated to be higher are: (i) energy (increase of Rs 660 crore), (ii) urban development (Rs 444 crore), and (iii) rural development (Rs 228 crore).

Table  2 :  Expenditure budget 2024-25 (in Rs crore)

Items

2022-23 Actuals

2023-24 Budgeted

2023-24 Revised

% change from BE 23-24 to RE 23-24

2024-25 Budgeted

% change from RE 23-24 to BE 24-25

Revenue Expenditure

14,864

17,186

18,294

6%

19,653

7%

Capital Outlay

2,742

3,812

5,720

50%

5,870

3%

Loans given by the state

35

37

50

37%

51

3%

Net Expenditure

17,641

21,034

24,064

14%

25,574

6%

Sources:  Annual Financial Statement, Meghalaya Budget 2024-25; PRS.

Committed expenditure:  Committed expenditure of a state typically includes expenditure on payment of salaries, pensions, and interest.  A larger proportion of budget allocated for committed expenditure items limits the state’s flexibility to decide on other expenditure priorities such as capital outlay.   In 2024-25, Meghalaya is estimated to spend Rs 9,173 crore on committed expenditure, which is 39% of its estimated revenue receipts.  This comprises spending on salaries (26% of revenue receipts), pension (8%), and interest payments (5%).  In 2022-23, as per actuals, Meghalaya spent 53% of its revenue receipts towards committed expenditure.

Table  3 : Committed Expenditure in 2024-25 (in Rs crore)

Committed Expenditure

2022-23 Actuals

2023-24 Budgeted

2023-24 Revised

% change from BE 23-24 to RE 23-24

2024-25 Budgeted

% change from RE 23-24 to BE 24-25

Salaries

5,117

5,798

5,899

2%

6,073

3%

Pension

1,673

1,794

1,764

-2%

1,865

6%

Interest payment

1,029

1,169

1,169

1%

1,236

4%

Total Committed Expenditure

7,818

8,761

8,832

1%

9,173

4%

Sources: Annual Financial Statement, Meghalaya Budget 2024-25; PRS.

Sector-wise expenditure:  The sectors listed below account for 65% of the total expenditure on sectors by the state in 2024-25.  A comparison of Meghalaya’s expenditure on key sectors with that by other states is shown in Annexure 1.

Table  4 : Sector-wise expenditure under Meghalaya Budget 2024-25 (in Rs crore)

Sector

2022-23 Actuals

2023-24 Budgeted

2023-24 Revised

2024-25 Budgeted

% change from RE 23-24 to BE 24-25

Education, Sports, Arts, and Culture

3,085

3,109

3,429

3,846

12%

Rural Development

1,185

1,593

3,368

2,001

-41%

Health and Family Welfare

1,487

1,805

1,862

1,971

6%

Roads and Bridges

1,385

1,483

1,702

1,877

10%

Energy

868

704

1,403

1,539

10%

Agriculture and Allied Activities

894

1,196

1,086

1,290

19%

Police

1,052

1,207

1,267

1,279

1%

Social Welfare and Nutrition

397

832

769

1,022

33%

Urban Development

365

487

972

932

-4%

Water Supply and Sanitation

710

640

732

902

23%

% of total expenditure on all sectors

65%

62%

69%

65%

-

Sources: Annual Financial Statement, Meghalaya Budget 2024-25; PRS.

Receipts in 2024-25

  • Total revenue receipts for 2024-25 are estimated to be Rs 23,515 crore, an increase of 6% over the revised estimates of 2023-24.  Of this, Rs 4,788 crore (20%) will be raised by the state through its own resources, and Rs 18,727 crore (80%) will come from the centre.  Resources from the centre will be in the form of state’s share in central taxes (40% of revenue receipts) and grants (40% of revenue receipts).

  • Devolution:  In 2024-25, state’s share in central taxes is estimated at Rs 9,356 crore, an increase of 10% over the revised estimates of 2023-24.

  • Grants from the centre in 2024-25 are estimated at Rs 9,371 crore, a decrease of 3% over the revised estimates for 2023-24.  As per revised estimates, in 2023-24, grants from the centre are estimated to be 27% higher than the budget estimate.  One key reason is a higher receipt estimated on account of Pradhan Mantri Awas Yojana-Gramin.  Grants for this scheme are estimated to be  Rs 1,624 crore at the revised stage, significantly higher than the budget estimate (Rs 200 crore).

  • State’s own tax revenue:  Meghalaya’s total own tax revenue is estimated to be Rs 4,041 crore in 2024-25, an increase of 24% over the revised estimate of 2023-24.  Own tax revenue as a percentage of GSDP is estimated at 7.6% in 2024-25, significantly higher than the revised estimates for 2023-24 (6.9%).   As per the actual figures for 2022-23, own tax revenue as a percentage of GSDP was 6.2%.

Table  5 : Break-up of the state government’s receipts (in Rs crore)

Items

2022-23 Actuals

2023-24 Budgeted

2023-24 Revised

% change from BE 2023-24 to RE 2023-24

2024-25 Budgeted

% change from RE 2023-24 to BE 2024-25

State's Own Tax

2,651

3,205

3,262

2%

4,041

24%

State's Own Non-Tax

457

743

758

2%

747

-1%

Share in Central Taxes

7,286

7,835

8,471

8%

9,356

10%

Grants-in-aid from Centre

4,426

7,633

9,696

27%

9,371

-3%

Revenue Receipts

14,820

19,414

22,188

14%

23,515

6%

Non-debt Capital Receipts

25

28

28

0%

30

8%

Net Receipts

14,844

19,442

22,216

14%

23,545

6%

BE is Budget Estimates; RE is Revised Estimates. 
Sources: Annual Financial Statement, Meghalaya Budget 2024-25; PRS.

  • In 2024-25, State GST is estimated to be the largest source of own tax revenue (49% share).  State GST revenue is estimated to increase by 12% over the revised estimate for 2023-24.

  • Revenue from sales tax/VAT in 2024-25 is expected to see an increase of 40% as compared to the revised estimate for 2023-24.  Revenue from state excise is also expected to increase by 52% over the revised estimate for 2023-24.

Table  6 :  Major sources of state’s own-tax revenue (in Rs crore)

Head

2022-23 Actuals

2023-24 Budgeted

2023-24 Revised

% change from BE 23-24 to RE 23-24

2024-25 Budgeted

% change from RE 23-24 to BE 24-25

State GST

1,477

1,785

1,785

0%

1,995

12%

Sales Tax/ VAT

622

792

827

4%

1,156

40%

State Excise

365

413

435

5%

661

52%

Taxes on Vehicles

132

150

150

0%

163

8%

Stamps Duty and Registration Fees

28

32

32

0%

34

5%

Land Revenue

4.9

5.9

5.9

0%

7.1

21%

GST Compensation Grants

0

0

33

-

-

100%

Sources: Annual Financial Statement, Revenue Budget, and Meghalaya Budget 2024-25; PRS.

Deficits, Debt, and FRBM Targets for 2024-25

The Meghalaya Fiscal Responsibility and Budget Management Act, 2006 provides annual targets to progressively reduce the outstanding liabilities, revenue deficit, and fiscal deficit of the state government.

Revenue surplus:  It is the difference of revenue expenditure and revenue receipts.   A revenue surplus implies that the government does not need to borrow to finance those expenses which do not increase its assets or reduces its liabilities.  The budget estimates a revenue surplus of Rs 3,862 crore (or 7.3% of GSDP) in 2024-25.  Meghalaya receives grants for revenue deficit as recommended by the Fifteenth Finance Commission.  In 2022-23, the state received Rs 1,033 crore as post devolution revenue deficit grants.   In 2023-24, the state is estimated to receive Rs 715 crore in such grants.  In 2024-25, the state will receive Rs 110 crore as revenue deficit grants, however, no grants have been recommended for 2025-26.  

Fiscal deficit:  It is the excess of total expenditure over total receipts.  This gap is filled by borrowings by the government and leads to an increase in total liabilities.  In 2024-25, the fiscal deficit is estimated to be 3.8% of GSDP.  For 2024-25, the central government has permitted fiscal deficit of up to 3.5% of GSDP to states, of which 0.5% of GSDP will be available only upon carrying out certain power sector reforms.  The state will also be eligible to avail 50-year interest-free loan for capital outlay from the central government over and above its borrowing limit.  In 2022-23, the state received Rs 1,049 crore through such loans; however, the state has not budgeted to receive this loan in 2023-24 and 2024-25.  

As per the revised estimates, in 2023-24, the fiscal deficit of the state is expected to be 3.9% of GSDP.  This is higher than the budget estimate (3.4% of GSDP).  Fiscal deficit is projected to be lowered to 3.4% of GSDP by 2027-28.  

Outstanding liabilities:  Outstanding liabilities is the accumulation of total borrowings at the end of a financial year, it also includes any liabilities on public account.  At the end of 2024-25, the outstanding liabilities are estimated to be 37.9% of GSDP, lower than the revised estimate for 2023-24 (38.1% of GSDP).  The outstanding liabilities significantly increased in 2022-23 (43.2% of GSDP).  They are estimated to decrease to 35% of GSDP at the end of 2027-28. 

Figure  2 : Revenue and Fiscal Balance (% of GSDP)

Note: *Figures for 2025-26, 2026-27, and 2027-28 are projections; RE is Revised Estimates; BE is budget estimates.
Sources: Medium Term Fiscal Policy, Meghalaya Budget 2024-25; PRS.
  

Figure  3 : Outstanding Liabilities (as % of GSDP) 

Note: *Figures for 2025-26, 2026-27 and 2027-28 are projections; RE is Revised Estimates; BE is budget estimates.
Sources: Medium Term Fiscal Policy, Meghalaya Budget 2024-25; PRS.

Outstanding Government Guarantees: Outstanding liabilities of states do not include a few other liabilities that are contingent in nature, which states may have to honour in certain cases.  State governments guarantee the borrowings of State Public Sector Enterprises (SPSEs) from financial institutions.  As on March 31, 2023, the state’s outstanding guarantee is estimated to be Rs 2,978 crore, which is 7% of Meghalaya’s GSDP in 2022-23.   A majority of these guarantees (Rs 2,960 crore) belong to the power sector.  

Annexure 1:  Comparison of states’ expenditure on key sectors

The graphs below compare Meghalaya’s expenditure in 2024-25 on six key sectors as a proportion of its total expenditure on all sectors.  The average for a sector indicates the average expenditure in that sector by 31 states (including Meghalaya) as per their budget estimates of 2023-24.  [1]

  • Education:  Meghalaya has allocated 15.1% of its expenditure on education in 2024-25.  This is higher than the average allocation for education by states in 2023-24 (14.7%).

  • Health:  Meghalaya has allocated 7.7% of its total expenditure towards health, which is higher than the average allocation for health by states (6.2%).

  • Rural development:  Meghalaya has allocated 7.8% of its expenditure on rural development.  This is higher than the average allocation for rural development by states (5%).

  • Police:  Meghalaya has allocated 5% of its expenditure towards police.  This is higher than the average allocation towards police by states (4.2%).

  • Agriculture:  Meghalaya has allocated 5.1% of its total expenditure towards agriculture, which is lower than the average expenditure on agriculture by states (5.9%).

  • Energy:  Meghalaya has allocated 6% of its total expenditure towards energy, which is higher than the average allocation by states (4.7%).







Note: 2022-23, 2023-24 (BE), 2023-24 (RE), and 2024-25 (BE) figures are for Meghalaya.
Sources: Annual Financial Statement, Meghalaya Budget 2024-25; various state budgets; PRS.

  [1]  The 31 states include the Union Territories of Delhi, Jammu and Kashmir, and Puducherry.

Annexure 2:  Comparison of 2022-23 Budget Estimates and Actuals

The following tables compare the actuals of 2022-23 with budget estimates for that year.

Table  7 : Overview of Receipts and Expenditure (in Rs crore)

Particular

2022-23 BE

2022-23 Actuals

% change from BE to Actuals

Net Receipts (1+2)

16,069

14,844

-8%

1. Revenue Receipts (a+b+c+d)

16,035

14,820

-8%

a. Own Tax Revenue

2,575

2,651

3%

b. Own Non-Tax Revenue

731

457

-38%

c. Share in central taxes

6,264

7,286

16%

d. Grants-in-aid from the Centre

6,466

4,426

-32%

     Of which GST compensation grants

50

0

-100%

2. Non-Debt Capital Receipts

33

25

-26%

3. Borrowings

2,632

6,221

136%

Net Expenditure (4+5+6)

17,917

17,641

-2%

4. Revenue Expenditure

15,376

14,864

-3%

5. Capital Outlay

2,463

2,742

11%

6. Loans and Advances

79

35

-56%

7. Debt Repayment

964

3,750

289%

Revenue Balance*

660

-44

-107%

Revenue Balance (as % of GSDP)*

1.6%

-0.1%

-

Fiscal Deficit

1,849

2,796

51%

Fiscal Deficit (as % of GSDP)

4.5%

6.5%

-

Note: *Negative sign (-) indicates a revenue deficit.
Source: Meghalaya Budget Documents of various years; PRS.

Table  8 : Key Components of State's Own Tax Revenue

Tax Source/Head

2022-23 BE

2022-23 Actuals

% change from BE to Actuals

Stamps Duty and Registration Fees

38

28

-26%

Sales Tax/ VAT

748

622

-17%

State Excise

350

365

4%

Taxes and Duties on Electricity

1.5

1.6

7%

Land Revenue

4.5

4.9

9%

State GST

1,316

1,477

12%

Taxes on Vehicles

100

132

31%

Source: Meghalaya Budget Documents of various years; PRS.

Table  9 : Allocation towards Key Sectors

Sector

2022-23 BE

2022-23 Actuals

% change from BE to Actuals

Welfare of SC, ST, OBC, and Minorities

174

86

-51%

Social Welfare and Nutrition

701

397

-43%

Irrigation and Flood Control

194

140

-28%

Agriculture and Allied Activities

1,068

894

-16%

Police

1,163

1,052

-10%

Health and Family Welfare

1,618

1,487

-8%

Transport

1,501

1,386

-8%

     of which Roads and Bridges

1,460

1,385

-5%

Rural Development

1,278

1,185

-7%

Housing

232

244

5%

Education, Sports, Arts, and Culture

2,816

3,085

10%

Water Supply and Sanitation

589

710

21%

Urban Development

299

365

22%

Energy

458

868

90%

Source: Meghalaya Budget Documents of various years; PRS.

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