Reforms, regular auditing needed to keep ADCs’ financial health in shape

The crisis at the Garo Hills Autonomous District Council is deepening. The GHADC employees’ protest has been ongoing for nearly two months. The staff has refused to accept a piecemeal offer and demanded that the full salary for 44 months be paid to them.

44 months, 4 months short of four years. And for this long period, the employees of the Garo Hills district council have been working and surviving without any payment. The district council in the Jaintia Hills is facing the same fate. Here, over one thousand employees did not receive their salaries for 7 months. Finally, last month, the state government released Rs 35 crore as the ADC’s share of royalty.

In the case of the council in the Khasi Hills, there were delays in the payment of salaries; however, the situation was not as critical as the GHADC. But this issue was raised during a KHADC session two years ago. And the chief executive member mentioned that it was the state government that delayed paying the royalty.

Now, why has the government been delaying payments of royalty to the district councils? As per the Sixth Schedule, the taxes on professions, trades and vehicles, among others, will go to the ADCs. Taxes are generated as a continuous process. And this payment to ADCs, routed through the government, should also be continuous. This payment is apart from the royalties which the ADCs earn from major and minor mineral extraction.

In the context of GHADC, the state government recently said the annual salary requirement is Rs 70 crore, but the revenue does not exceed Rs 30 crore. There is a yawning gap of Rs 40 crore. But why was there a delay in paying the Rs 30 crore? Had that been paid regularly, the employees would have had received some amount as salary.

The government, anyway, has to intervene to bridge the gap in salary requirements and revenue generated. It has already announced that it would pay the pending salary. But the question is, how will the government pay the huge dues? It will definitely not be paid from its exchequer. Let’s say the Rs 30 crore per year has been accumulating, and in four years, the amount has become Rs 120 crore. Therefore, the government must be using this fund for partial salary payments. The gap of Rs 160 crore over four years has to be addressed. However, there is no clear picture of this division of the amount, and there is definitely no clear explanation from the government about the delay in the payment of royalties.

In 2022, as per the statement of Minister Sniawbhalang Dhar, the government released Rs 209.39 crore to the ADCs, and the pending amount to be paid was Rs 21 crore. And yet, the GHADC employees have not received salaries for 44 months. What happened to the released and pending funds?

The problem is that there has been no regular auditing of the ADCs’ finances. The Comptroller and Auditor General should have been auditing. It is only in the last two years that some auditing has been done. Due to the lack of proper auditing, there is no clear picture of the checks and balances.

In the past, several committees suggested financial reforms at the district councils. But the streamlining has not been done, leading to the present crisis.

A State Finance Commission meant for the ADCs was notified in 2012, but not formed, unlike other councils in the North East. Funds were supposed to be routed through the Finance Commission.

So, what is needed immediately is this financial reform, so that the burden on ADCs can be lessened. Constructive steps have to be taken to reduce the ballooning financial burden. Along with that, regular audits must be carried out so that there is accountability and transparency. As an immediate relief, the government must come to the rescue and bridge the financial gaps, as well as help the ADCs find a way to start the financial reforms.