SHILLONG: The Chief Minister of Meghalaya, Conrad K. Sangma, has urged the President of the Meghalaya Pradesh Congress Committee (MPCC), Vincent H. Pala, to thoroughly research, the state’s loan structure. This appeal comes in response to the MPCC President’s accusation that the NPP-led MDA government is driving the state into a debt trap.
Speaking to the media, Conrad K. Sangma said, “I have said this many times, perhaps the MPCC President cannot understand the financial numbers that I am explaining. I have shown the state’s growth. We have clarified regarding the debt.”
”The Government of India has its own system, and the Finance Ministry and the RBI have their own mechanisms to ensure that no state can take loans beyond the prescribed level. We are still well within that level,” he added.
The Chief Minister pointed out that the overall growth in Meghalaya is being supported by approximately 70% of funds generated from the state’s own internal revenue. Thus, a large portion of the budget comes from the state’s own earnings.
”The various loans that the MPCC perhaps refers to, which are World Bank loans, ADB loans, and other Externally Aided Project (EAP) loans, are on an 80:20 ratio regarding the debt and the expenditure that we have to pay up front,” he explained.
”Therefore, the State Government pays 20% up front. The 80% is the loan component. 90% of that loan is a grant from the Central Government, and the Meghalaya Government only has to repay 10% (of the 80% loan taken),” he stated.
”Thus, if you look at the total calculation, 72% is reimbursed by the Central Government, and 28% is paid by the State Government, which has to be paid up front. So, the question of this leading to a debt trap no longer arises,” he added.
The Chief Minister further stated, “The MPCC President is trying to mislead the public, which is unfortunate. They see the growth and cannot find any other way to criticize the progress that is underway, and for this reason, they are misguiding the public. Therefore, I urge them to first understand the loan procurement system before making or giving such statements.”
