Shillong, Sept 10: Leader of Opposition Mukul Sangma has criticised the NPP-led government for using borrowed funds to service the repayment of both principal and interest amount instead of creating assets.
He warned that this will lead the state to a disastrous future.
Mukul cited the observation of the CAG in its report for 2022-23.
The report said the goverment usually relies on fiscal deficits to expand popular policies, such as welfare programmes and public works, without having to raise taxes or cut spending elsewhere in the budget. The borrowed funds are used for capital assets formation or for creation of economic and social infrastructure, so that assets created through borrowings could pay for themselves by generating an income stream. Thus, it is desirable to fully utilize borrowed funds for the creation of capital assets and to use revenue receipts for the repayment of principal and interest. The state government, however, spent only 44 per cent of the borrowings of the current year (6221 crore) on capital expenditure ( 2742 crore). It would therefore appear that balance of borrowings in the public debt was utilized to repay the principal (3750 crore) and part of interest on public debt of previous years.
Addressing the media on Monday, Sangma said 56% of the borrowings was used to repay principal and interest amount.
The goverment is further borrowing to service the repayment of principal and interest.
“This is where the concern lies and this is where the government is lying to the people…I condemn this attitude as this is going to lead the state to a disastrous future as has been honestly and truly reflected by the red flag given by the CAG. It is a red flag,” he added.
