Meghalaya economy grows 12.03 per cent in 2024-25, but revenue receipts fall: CAG

Meghalaya’s economy grew by 12.03 per cent in 2024-25, outpacing India’s GDP growth of 9.78 per cent during the year, even as the state recorded a decline in revenue receipts due primarily to a sharp reduction in grants-in-aid from the Centre, according to the Comptroller and Auditor General of India (CAG).

The findings were contained in the CAG’s State Finances Audit Report for Meghalaya, which was tabled in the state Assembly on August 28.

According to the report, Meghalaya’s Gross State Domestic Product (GSDP) increased from Rs 53,223 crore in 2023-24 to Rs 59,626 crore in 2024-25, registering strong economic growth during the year.

However, the state’s revenue receipts declined by 4.58 per cent, from Rs 17,977.86 crore in 2023-24 to Rs 17,153.91 crore in 2024-25.

The decline was primarily driven by a 40.15 per cent fall in grants-in-aid from the Centre, which dropped from Rs 5,574.86 crore to Rs 3,336.37 crore during the period. The CAG noted that this was the lowest amount of central grants received by Meghalaya in five years.

Non-tax revenue also declined by 9.40 per cent, falling from Rs 523.25 crore in 2023-24 to Rs 474.08 crore in 2024-25.

The decline in central grants and non-tax revenue was partly offset by an increase in the state’s share of Union taxes and duties. Meghalaya’s share rose by 13.93 per cent to Rs 9,870.40 crore in 2024-25.

The state’s own revenue, comprising tax and non-tax receipts, increased by 5.54 per cent to Rs 3,947.14 crore during the year.

Despite the improvement in its own revenue collection, Meghalaya continued to remain heavily dependent on transfers from the Centre. Central transfers accounted for 76.99 per cent of the state’s total revenue receipts in 2024-25, while the state’s own resources contributed 23.01 per cent.

The report also highlighted a widening gap between economic growth and revenue mobilisation. Meghalaya’s revenue receipts-to-GSDP ratio declined from 33.78 per cent in 2023-24 to 28.77 per cent in 2024-25.

The CAG observed that the growth in Meghalaya’s own tax revenue had generally remained below the pace of expansion of the state’s GSDP.

It recommended that the state broaden its tax base, strengthen tax compliance and improve collection efficiency to increase revenue mobilisation. The measures, it said, would help reduce Meghalaya’s dependence on central transfers and support more sustainable fiscal management.