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New Govt to bear brunt of financial crunch

SHILLONG: The new government in 2018 will have to bear the brunt of the financial crisis in the state due to varied reasons.
Besides the ban on coal and limestone, the committed expenditure of the government on various fronts, including creation of new districts, civil subdivisions, community and rural development blocks and police stations have added to the financial crunch.
Unlike other promised community and rural development blocks including Mawlai, Mawpat C&RD block was not included in the Budget.
It was under pressure from a few legislators that the government included it later, thereby incurring additional expenditure.
Sources said though Chief Minister Mukul Sangma claimed that development initiatives should not be seen in the context of financial crunch, the new four districts created five years ago before the last Assembly polls in 2012 do not have basic facilities.
Rs 100 crore per month needed for new pay
The government is currently in a dilemma due to the recommendation of the Fifth Pay Commission that suggested over 25 per cent hike in the salary of government employees.
The additional financial burden for the state government will be around Rs 100 crore per month for the salary hike as currently around Rs 400 crore is spent per month as salary of the employees.
Loss of Rs 600 crore per year due to coal ban
An official said on Friday that Rs 600-crore loss is calculated per year due to the ban on coal and there will be additional fund crunch due to the ban on limestone.
It was three years ago that the National Green Tribunal had banned rat-hole mining.
The ban on coal has also reduced the consumption of liquor, especially in the coal mining areas that subsequently reduced the excise revenue.
Later, the notification of the excise department to restrict sale of liquor in parts of the State had also affected the revenue for at least a year.
A government official added that with uncertainty over GST share, which the state would get, it would be difficult to assess the revenue generation of the state.
Austerity measures
Considering these factors, the principal secretary in the Finance Department, RV Suchiang, on August 8 had issued economical measures in respect of administrative, developmental and establishment expenditure during 2017-2018.
The austerity measures include curtail on creation of posts, travel expenses, leave travel concession, leave encashment, purchase of vehicles and electric equipment, furnishing of quarters, hosting dinners and lunches, maintenance of buildings, among others.
However, with just six months away for the Assembly polls and subsequent formation of a new government, the desired result due to the austerity measures may not be achieved in the short span of time.

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