Meghalaya recorded an expansion of 12.03 per cent in its economy during the 2024-25 fiscal period, comfortably outpacing India's national GDP growth rate of 9.78 per cent, according to findings released by the Comptroller and Auditor General. However, this robust economic momentum ran parallel to a contraction in the state government's revenue receipts, which suffered due to a steep decline in financial grants originating from the central government.
Rise in Gross State Domestic Product
The state's Gross State Domestic Product saw a significant upward movement, climbing from Rs 53,223 crore in the 2023-24 financial year to reach Rs 59,626 crore during the 2024-25 period, as detailed in the State Finances Audit Report prepared by the CAG. This crucial official document was formally tabled before the Meghalaya Assembly on August 28, laying out a comprehensive assessment of the fiscal health and macroeconomic performance of the state.
Decline in Central Grants and Revenue Receipts
Despite the broader economic expansion across various sectors, Meghalaya experienced a 4.58 per cent drop in overall revenue receipts during the year, with total collections sliding downward from Rs 17,977.86 crore to Rs 17,153.91 crore. The primary driver behind this negative trend was a massive 40.15 per cent reduction in grants-in-aid disbursed by the Centre. Central grants plummeted from Rs 5,574.86 crore in 2023-24 down to Rs 3,336.37 crore in 2024-25, marking the lowest level recorded by the state administration over a five-year span. Additionally, non-tax revenue registered a decrease of 9.40 per cent, dropping from Rs 523.25 crore to Rs 474.08 crore.
Buffer from Union Taxes and Own Revenue Growth
The shortfall resulting from reduced central grants was partially cushioned by a healthy increase in Meghalaya's designated share of Union taxes and duties. Under this specific category, the state collected Rs 9,870.40 crore in 2024-25, reflecting a 13.93 per cent jump compared to the preceding financial year. Simultaneously, Meghalaya's own internal revenue generation, encompassing both tax and non-tax components, advanced by 5.54 per cent to settle at Rs 3,947.14 crore. Even with these internal gains, the state administration continued to exhibit a heavy reliance on financial transfers originating from the national capital.
High Central Dependence and CAG Recommendations
Central transfers constituted 76.99 per cent of Meghalaya's total revenue receipts in the 2024-25 period, while its own generated resources accounted for the remaining 23.01 per cent. The CAG audit also highlighted a widening gap between the rapid pace of economic expansion and the efficiency of local revenue mobilisation. The ratio comparing revenue receipts to GSDP dropped from 33.78 per cent in 2023-24 down to 28.77 per cent in 2024-25, with growth in the state's own tax collection generally lagging behind the broader economic growth. To solidify Meghalaya's fiscal foundation, the audit report recommended widening the existing tax base, enforcing better compliance measures, and streamlining revenue collection to help the state lessen its dependence on central funding transfers.
