Address by E. K. Mawlong Chief Minister, Meghalaya
49th N.D.C. Meeting, 1^st September 2001, Vigyan Bhavan, New Delhi.

Esteemed Prime Minister, Distinguished members of the National Development Council and Friends,

I am happy to participate in the 49^th Meeting of the National Development Council, which has been convened after a gap of over 30 months. As the Council assembles for its first session in the twenty-first century, I take this opportunity to convey the greetings of my State and its peoples to the Hon'ble Prime Minister Shri Atai Behari Vajpayee'ji, Hon'ble Ministers of the Union, my colleagues-the Distinguished Chief Ministers of States, State Ministers and to all other participants of this meeting, here today

We have an extensive agenda before us and I propose to confine my observations to limited issues, from the perspective of the State of Meghalaya only -

AGENDA ITEM No. 1: DRAFT APPROACH PAPER TO THE TENTH FIVE YEAR PLAN

01. GROWTH RATE:

While a targeted growth rate of 6.5% of GDP has been fixed by this Council for the Ninth Plan, the actual growth rate has been less encouraging. In view thereof, I suggest that we discuss all aspects of the matter at our meeting here today, to arrive at a realistic and achievable growth rate, before we endorse the proposal for fixing on a growth rate of 8% of GDP for the Tenth Plan period. I urge for introspection with particular reference to the need for ensuring accelerated and balanced improvement to the quality of human life and basic social services, in all parts of our country, more particularly the Special Category States.

02. DEVELOPMENTAL STRATEGIES FOR SPECIAL CATEGORY STATES:

Meghalaya and other Special Category States are indebted to the Planning Commission and the Government of India for their continued concern and special support. However, in so far as Meghataya is concerned, the plan expenditure by the end of the Ninth Plan is not likely to exceed Rs. 1841.16 crores which is 73.63% of the approved Ninth Plan outlay of Rs. 2500.62 crores. Calculated on 1996-97 prices, our achievement will be much lower. Non-materialisation of the expected flow of over Rs. 700.00 crores from institutional sources including the externally aided programme, during the Ninth Plan period, has resulted in sharp short fall in approved plan expenditure.

In this context, it has to be reiterated that while bank-deposits are constantly increasing in the State, the level of bank-credits has fallen. The Credit:Deposit Ratio of Meghalaya on 31.03.2001 is 20.21%. While a number of factors may have contributed to the decreasing level of credit flow in our State, incompatible banking and lending norms are undoubtedly the main cause. While such norms may be appropriate for the rest of the country, they are neither in tune nor harmonious to the ground realities in Meghalaya, which has its own unique land tenural and land documentation system. We have continually urged the Central Government and the Reserve Bank of India to resolve the dead lock by-

(a) Accepting land records issued by Autonomous District Council, wherever required, in view of the rights and responsibilities enjoined on the Autonomous District Councils in such regard, by the provisions of the Sixth Schedule to the Constitution of India.

(b) Keeping in view the demographic profile, the population density and spatial spread of most of our habitats, it is neither pragmatic nor feasible for the single Branch Manager of rural Bank Branches, to attend to regulatory as well as developmental banking functions on the same day. In view thereof, we have suggested that -

1. Either, Rural Branches of all Banks should be provided with one Manager for regulatory functions and another Manager for developmental banking, or
2. Alternatively, all Rural Banks should carry on regulatory Banks on three earmarked days each week, leaving three earmarked days for developmental banking.

(c) Revise model schemes for all developmental sectors in respect of each State of the North Eastern region, keeping in view the need to make bank-credit more compatible and harmonious with ground realities of each State of the region and the need for making procedures therefore, more borrower-friendly.

03. NORMAL CENTRAL ASSISTANCE:

We appreciate the constraints faced by the Planning Commission in the matter of enhancing the level of Normal Central Assistance, which has remained constant throughout the Ninth Plan period. However, low levels of flow of institutional funds for developmental works in Meghalaya and other North Eastern States, coupled with the negligible amount of externally aided funds which have flown into such areas, the developmental gap between the States of the North Eastern Region and other parts of the country have further widened, although the Planning Commission has provided us programme-specific Additional Central Assistance and Special Central Assistance, from time to time, as well as funds from the Non-lapsable Pool of Central Resources.

Keeping in view the imperative need to reduce developmental-gap between the more developed and lesser developed regions of the country, I strongly urge this Council to recommend incremental levels of Normal Central Assistance for the North Eastern States, with a view to enable them to increase the pace of implementation of programmes for un-covered sectors of development and to bridge infrastructural gaps.

04. NEED TO REVERSE INCREASING CENTRALISATION OF DEVELOPMENTAL PROGRAMMES:

While we have been making every effort to increasingly decentralised administration to the grass root level, in the spirit of the 73^rd and 74^th amendment of the Constitution, we note with concern the trend of increasing centralisation of developmental programmes, during the last few years.

I wish to particularly bring to the notice of this Council that the earlier Minimum Need Programame under State Plan was merged with the Basic Minimum Services Programme during the Nineties. Of late, this Programme has been renamed as Pradhan Mantri Gramodaya Yojana consisting of several components including the Pradhan Mantri Gram Sadak Yojana. Unfortunately, the guidelines stipulated for all such components of PMGY are completely centralised. This has resulted in avoidable delays in the formulation and sanctioning of the programme, apart from increasing the administrative expenditure component thereof. I am sure that my Colleagues, the Hon'ble Chief Ministers and the Central Ministries will readily agree that there is no merit in centralising the formulation, sanctioning and supervision of these grass root level schemes, which need to be left entirely to the States, keeping in view the federal nature or our polity.

I therefore urge this Council to recommend that specification of guidelines and formulation and sanction of schemes under all components of the PMGY, including PMGSY, be left entirely to the discretion of the States, in the larger interest of ensuring the effectivity of this programme, subject to the concerned Ministries being kept informed of ground realities necessitating such guidelines, as the States might choose to specify.

AGENDA ITEM No.ll: REPORT OF THE NDC SUB-COMMITTEE ON THE CRITERION FOR ALLOCATION OF FUNDS UNDER MAJOR RURAL POVERTY ALLEVIATION PROGRAMMES:

While we broadly endorse the recommendations contained in the Report of the Sub-Committee, it needs to be noted that the macro as well as micro guidelines and parametres of all poverty-alleviation programmes have to be harmonious with ground realities of each State. There is little doubt that existing Poverty Alleviation programmes have to a good extent, been handicapped by programme guidelines which are not compatible or harmonious with conditions prevailing in different States.

I therefore, urge this Council to recommend that Central Government may only lay down broad principles and macro guidelines, leaving detailed guidelines for implementation of the programmes to be determined by State Governments for their respective States, keeping in view ground realities. I am confident that this would make the Poverty Alleviation programmes more meaningful and effective and would result in accelerated removal of poverty.

AGENDA ITEM No. Ill: STATUS REPORT ON THE NDC SUBCOMMITTEE ON TRANSFER OF CENTRALLY SPONSORED SCHEMES.

I wish to reiterate that Meghalaya like other North Eastern States has been unable to fully avail the earmarked level of central assistance under Centrally Sponsored Programmes due to non-availability of State resources to meet 25% of the programmes' outlays, as State Share.

Keeping in view the increasing developmental gap of the State and the region with the other parts of the country, I strongly urge this Council to recommend that as a special case, the norms for funding alt Centrally Sponsored programmes in the Special Category States be modified from 75:25 to 90:10 between the Centre and the State. This would enable the Special Category States to more fully avail funds earmarked under this programme and thereby accelerate the pace of reversing the trend of increasing developmental gap between these States and other regions of this country

AGENDA ITEM No. IV: PLACING UTTARANCHAL ON THE LIST OF SPECIAL CATEGORY STATES :

We will be happy to welcome the new State of Uttaranchal to the fold of Special Category States, provided the percentage of funds earmarked at present for such Special Category States is suitably enhanced to ensure that the inclusion of Uttaranchal does not result in any reduction of the existing share of Special Category States, in absolute terms.

AGENDA ITEM No. V: PLACING MID-TERM APPRAISAL ON THE NINTH FIVE YEAR PLAN BEFORE THE NDC.

We have noted with concern the main findings contained in the Mid-term Appraisal Report on the Ninth Five Year Plan. The critical levels of shortfall in plan expenditure from approved Ninth Plan levels will have its own long term effect on all development sectors and consequently upon the future Five Year Plans. This effect would be more pronounced in respect of the economy of each Special Category States.

I therefore urge this Council to recommend that additional funds amounting to not less that 20% of the current year's approved annual plan outlay be located and allocated as Special Central Assistance to each of the Special Category States, to bridge a part of the overall shortfall in Ninth Plan expenditure, during the remaining months of the Ninth Plan period. This would to some extent help generate a better infrastructural base for serving as the foundation of Tenth Plan development strategies.

OTHER MATTERS : STATE FISCAL REFORMS FACILITY:

While the need for fiscal reforms is accepted in principle, we wish to reiterate that similar fiscal reforms were suo-motto introduced by us in Meghalaya from 1993-94 onwards. This enabled us to remain continually free of Ways and Means Advance and Overdrafts. However, the requirement of achieving 5 percent annual improvement in the revenue deficit/surplus as a proportion of revenue receipts will be extremely difficult to achieve for the Special Category States for the following reasons-

1. Our revenue base is very small and there is little scope for its enlargement.
2. Our Non-plan expenditure are relatively large and inflexible.
3. The need for larger doses of plan expenditure for building up the required infrastructure for reducing infrastructural gaps existing in the North-East.

Consequently, withholding of 15% of our revenue-deficit-grant has adversely affected the stability of our finances. At the same time, even if we perform well in our fiscal reforms programme, the amount of incentive fund to be made available to us from the Central Government's contribution will be meagre since it is solely based on population.

It is therefore urged that this Council be pleased to recommend that the requirement of 5% annual improvement in the revenue deficit/surplus as a proportion of revenue receipt, may be relaxed in the case of North Eastern States and fixed at the level of 2%.

CONCLUSION:

With these few words, I thank you sir, for your patient hearing and wish the deliberation of this Council every success.

JAI HIND