SHILLONG: The State Congress President, Vincent H. Pala, delivered an indictment of the Conrad Sangma-led government, accusing it of recklessly driving the state towards an irreversible “debt trap.” Pala’s allegations, which he insists are backed by official CAG and government budget data, have been swiftly rejected by Chief Minister Conrad K. Sangma, setting the stage for a dramatic financial and political confrontation.
“State on the Brink!”
Pala, speaking to reporters in Shillong, claimed his team conducted extensive “homework” to expose the government’s alleged financial recklessness. “I wouldn’t make these claims if I hadn’t done my homework,” Pala said, while reacting to Chief Minister Conrad Sangma’s remark, urging the Congress president to do a “thorough research”.
He warned that the state’s loan-taking has escalated by a staggering 60% in recent years. The current debt pile of ₹25,000 crore translates to an unbearable ₹76,000 per capita debt burden on every citizen.
“I never said we are already in debt. I said the debt trap is near,” Pala exclaimed. He argued that the state’s internal revenue of just ₹4,225 crore is nearly swallowed whole by annual debt servicing costs of ₹3,500 crore (₹1,000 crore in interest and ₹2,500 crore in principal).
After committed expenditure, including a massive 7.9% of GSDP on government salaries, only a meager 2.6% of GSDP from internal revenue remains for vital capital works, schools, hospitals, and job creation for the poor.
Pala alleged massive revenue leakage due to corruption and claimed loans are not benefiting the public. He pointed to shoddy road construction, where new roads need to be rebuilt “twice a year” instead of lasting five, and the plight of contractors who are not being paid their bills.
The borrowed funds are allegedly funnelled into the constituencies and pockets of a small group of 12 MLAs and their associates, with the 48 other constituencies and the general public being neglected.
“The government justified the necessity for taking the loan for development, but where is the development? unemployment has doubled, making one of the highest in the country and let’s not even talk about infrastructure in the health and education sectors,” the Congress chief said.
“Baseless and Misleading” CM
Chief Minister Conrad K. Sangma had recently dismissed Pala’s claims as “baseless and misleading” and accused the Congress leader of “misinterpreting basic financial figures” to create public confusion.
CM Sangma asserted that the state’s borrowing remains well within the limits set by the Central Government and the RBI, with mechanisms in place to prevent over-borrowing.
The Chief Minister provided a detailed counter-explanation regarding loans from international bodies like the World Bank and ADB, which Pala cited as a major concern.
Sangma clarified that these Externally Aided Project (EAP) loans follow an 80:20 funding structure, where the state only pays 20% upfront.
Crucially, of the 80% loan component, 90% is essentially a grant from the Central Government to the state.
Sangma calculated that the Central Government effectively bears 72% of the repayment burden, leaving the state responsible for only 28%, dismissing the notion that these loans drive a massive debt trap.
The CM further argued that almost 70% of the funds used for development have come from the state’s own internal revenue, contradicting Pala’s narrative of total debt dependence.
The escalating financial war of words marks a major political flashpoint, forcing a public debate on Meghalaya’s true economic health.
