EnseMedia
Mukul Raises ‘Red Flag’ Over MDA Govt’s Borrowings, Increasing Fiscal Deficit
Shillong, Sept 10: Leader of Opposition Dr. Mukul Sangma has criticized the MDA government for raising its borrowing limit to service the repayment of both principal and interest, warning that this approach could steer the state towards a “disastrous future”. Addressing the media, Sangma labeled the government’s decision to increase the borrowing limit as a “red flag”, highlighting the grave concern it poses for the state’s financial health. This move has been severely condemned by Sangma, who fears it will have serious repercussions on Meghalaya’s future, as underscored by the red flag raised by the Comptroller and Auditor General (CAG).
Sangma elucidates the precarious financial situation by drawing an analogy, “If you have borrowed from the bank, and you have an EMI, but your income is insufficient, how will you manage? If you need to pay Rs 75,000 but you’re earning only Rs 50,000, you resort to borrowing again. This cycle of borrowing to fund the repayment of the principal and interest is akin to a financial abyss.” He emphasizes the danger of increasing the borrowing space to repay debts, a concern subtly yet firmly echoed by the CAG.
The former chief minister distinguishes this situation from borrowing soft loans from the Government of India, which offers more maneuverability considering the state’s constraints. He laments the government’s denial mode, which he finds condemnable, stressing the importance of fiscal health for the state’s future.
Furthermore, Sangma accuses the government of a “well-scripted modus operandi” to deviate from fiscal discipline, pointing out anomalies in the fiscal deficit targets and the debt GSDP ratio, which reflect insincerity towards financial prudence. He calls for strict adherence to the Meghalaya Fiscal Responsibility and Budget Management (MFRBM) Act, 2006, criticizing the government’s methodology as lacking comprehensive understanding and due diligence in fiscal management.
The TMC leader underscored the deviation in fiscal deficit targets from the set norms during his tenure, highlighting the government’s modus operandi to manipulate financial targets. He warns that such practices will inevitably lead to a disastrous future for the state.
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