Key Details
The Comptroller and Auditor General of India’s State Finances Audit Report for Meghalaya for 2024–25, published as Report No. 1 of 2026, assesses the State’s fiscal position, budget management and quality of financial reporting.
Fiscal indicator | 2024–25 position | Relevant comparison |
|---|---|---|
Nominal GSDP growth | 12.03% | National nominal GDP growth: 9.78% |
Revenue receipts | ₹17,153.91 crore | Down 4.58% from 2023–24 |
Post-audit revenue balance | ₹52.69 crore deficit | Accounts reported a ₹72.71 crore surplus |
Fiscal deficit | ₹5,184.01 crore; 8.69% of GSDP | Meghalaya FRBM ceiling: 3.5% |
Outstanding liabilities | ₹26,601.45 crore; 44.61% of GSDP | Meghalaya FRBM ceiling: 28% |
Pending utilisation certificates | 777 certificates worth ₹5,428.54 crore | Position as of 31 March 2025 |
Economic Growth Did Not Produce Comparable Revenue Growth
Meghalaya’s GSDP increased from ₹53,223 crore in 2023–24 to ₹59,626 crore in 2024–25. The tertiary sector contributed 58% of GSDP, followed by the primary sector at 25% and the secondary sector at 17%.
The fiscal benefit of this growth was limited. Revenue receipts fell 4.58%, principally because grants-in-aid from the Union government declined 40.15% to ₹3,336.37 crore. Non-tax revenue also fell 9.4%.
The State’s own revenue grew 5.54%, but remained below the pace of economic expansion. CAG therefore finds that Meghalaya’s revenue mobilisation has generally not kept pace with GSDP growth, leaving its finances sensitive to changes in Central transfers.
An Accounting Error Reversed the Revenue Position
The Finance Accounts reported a ₹72.71 crore revenue surplus. CAG found that ₹125.40 crore of revenue expenditure had been classified as capital expenditure, including grants-in-aid and a subsidy paid to private airlines.
After correcting this classification:
capital expenditure fell from ₹5,245.98 crore to ₹5,120.58 crore; and
the reported revenue surplus became a ₹52.69 crore revenue deficit.
This is more than a technical correction. Revenue expenditure funds current consumption and services, while capital expenditure is expected to create assets. Misclassification can therefore overstate both fiscal health and the amount invested in asset creation.
Borrowing Increased as Receipts Weakened
Meghalaya’s fiscal deficit widened from ₹3,152.21 crore in 2023–24 to ₹5,184.01 crore in 2024–25, reaching 8.69% of GSDP against the State’s statutory ceiling of 3.5%.
The State failed to meet its fiscal-deficit target in each year from 2020–21 to 2024–25. Its outstanding-liabilities ratio also exceeded the 28% ceiling throughout the past decade, rising to 44.61% in 2024–25.
Overall liabilities grew 23.61% during the year, almost twice the 12.03% increase in nominal GSDP. At the same time, the share of gross borrowing remaining after repayments declined to 27.49%, indicating that a growing portion of borrowing was being absorbed by existing debt obligations.
The Meghalaya Government told CAG that loans under the Special Assistance to States for Capital Investmentcontributed to the elevated liabilities ratio. The audit nevertheless assesses the ratio against the limits prescribed by the Meghalaya Fiscal Responsibility and Budget Management Act.
Committed Spending Is Narrowing Fiscal Flexibility
Salaries, pensions and interest payments together amounted to ₹9,545.73 crore, equivalent to 56% of revenue expenditure. Subsidies rose 136.62% to ₹139.63 crore, driven mainly by food, fisheries and agriculture programmes.
These expenditures are not interchangeable: pensions and interest are established obligations, while subsidies differ in purpose and design. Taken together, though, their growth leaves less flexibility to respond to revenue shocks or fund additional development expenditure.
CAG also found that the State had invested ₹4,444.43 crore in companies, corporations and other bodies but received returns of only ₹0.20 crore during 2024–25.
Large Pending Certificates Weaken Assurance Over Grant Spending
As of March 2025, 777 utilisation certificates covering ₹5,428.54 crore remained outstanding. These certificates establish whether grants were used for their approved purposes.
More than half of the outstanding amount related to the Community and Rural Development Department, followed by Health and Family Welfare and Power. Until the certificates are received, the expenditure recorded in government accounts cannot be treated as fully verified.
Budget execution showed another imbalance: savings of ₹5,670.80 crore were recorded across 60 grants and four appropriations. Persistent savings can indicate that provisions exceeded implementation capacity or that funds were not released and spent as planned.
Some Obligations Remained Outside the Headline Debt Position
CAG identified ₹406.39 crore of undischarged liabilities, equivalent to 7.84% of the fiscal deficit. These included:
₹217.92 crore of Central funds not transferred to State nodal agencies for Centrally Sponsored Schemes;
₹109.20 crore of outstanding off-budget borrowing;
unpaid interest, statutory fund transfers and pension contributions; and
pending tax refunds.
The report also found that ₹3.30 crore belonging to the Meghalaya State Electricity Regulatory Commission remained in bank accounts instead of being routed through the State’s Public Account.
These amounts are individually smaller than the reported debt stock, but their disclosure is necessary for a complete assessment of future payment obligations and available fiscal space.
What Does the Post-Audit Adjustment Mean?
A post-audit adjustment recalculates a fiscal indicator after CAG identifies transactions that were omitted or recorded under the wrong accounting category.
It does not mean that CAG has rewritten the State’s Finance Accounts. It shows how the fiscal position would appear if the identified misclassification or unrecorded liability were correctly reflected.
Policy Relevance
For Meghalaya, the audit points to three connected tests.
Revenue resilience: Faster GSDP growth will strengthen the budget only if it produces higher own-tax and non-tax receipts. The decline in Central grants exposes the risk of relying on transfers that can vary significantly between years.
Credible fiscal consolidation: A meaningful debt-reduction path needs to cover the reported fiscal deficit as well as off-budget and undischarged liabilities. It must also distinguish borrowing that creates productive assets from borrowing absorbed by existing commitments.
Stronger expenditure assurance: Linking fresh grants to timely utilisation certificates, improving departmental budget estimates and classifying expenditure correctly would make it easier for the Legislature to determine what was spent, what assets were created and which programmes were delayed.
The report also records two positive institutional developments: Meghalaya enacted the Meghalaya Ceiling on Government Guarantees Act, 2025, and began using Single Nodal Agency systems to improve the tracking of Centrally Sponsored Scheme funds.
Follow the Full Report Here: Report of the Comptroller and Auditor General of India on State Finances for 2024–25: Government of Meghalaya, Report No. 1 of 2026