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Overdraft is due to the failure of State government’s policies: ACOAM LUP

IT News
Imphal, June 14,

ACOAM Lup Kangleipak in a statement in connection with the state government’s overdraft said that the consecutive governments which ruled the state after it gained statehood have been promising the people that they will improve the economic condition of the state. In every election the political parties have promised this to the people. The promises include the reform of industrial policy, how the state will help the poor of this state. The time has come to ask whether the consecutive governments are able to deliver the promises they made to people, it added.
The statement urged that people need to ask that how the policies and programs taken up by consecutive governments and leaders have impacted the gross domestic product of the state. Manipur became a full-fledged state in 21st January 1972, since then the state has faced the crisis of over draft. Out of 10 states which were given special status, in the year 1997-1998 Manipur faced overdraft and RBI banned Manipur along with Assam and Mizoram from withdrawing more money as they couldn’t clear the overdraft. Again the state face overdraft and the payments were stopped in the year 1998-1999 along with Nagaland, Assam and Mizoram. The same problem has resurfaced again this year. We need to discuss how the situation is going to impact the people of Manipur and what the government is going to improve the state financially, given the crisis.
The state can borrow money from RBI under Ways and Means Advances (WMA) even while the state waits for receipts and bills for its financial activities. The state can use this credit policy according to RBI Act 1934 Section 17(5). The government must pay the credit it has taken availing WMA within three months. The RBI has written to State Bank of India that all the payments to the government of Manipur must be stopped as the government has breached the understanding it has with RBI. The situation has come up either because the state has failed to collect its revenues and taxes on time or there is a mismatch between the sum collected, it added.
If we observe carefully then we see that many states suffer from overdraft but due to the skilled financial management, they are able to clear the money they borrowed from RBI. Hence, the financial crisis is avoided in other states. Here, we need to ask how the state government of Manipur is managing the finances that the state is faced with such a crisis now and then. We must ask how much the financial condition of the state has improved. The statement asked whether it is the state government’s policies and programs which are actually harming the financial situation of Manipur.   According to data, Gross State Development Income which is an indicator for the financial health of Manipur has decreased. In the tear 2010-2011, it was 10.70 percent, it shot up to 17.70 percent in 2013-2014. However in the year 2015-16, it was 7.70 percent and was 7.90 in 2017-2018. This clearly indicates the failure in state policies.
The state is filled with youths who are well educated. They are now going outside the state to find livelihood working for private companies. 25 percent of Human resource in Information and Technology  sector consists of youths from North East. Instead of looking forward to bring FDI and generate revenue, it is still asking for funds from the centre. The government should create business and jobs where these youths could be employed. Given the financial situation of Manipur, if the government is still announcing  financial policies and programs then it is clear that the government has no financial accountability, according to the statement.

Jeet Akoijam

Jeet Akoijam, Resident Editor of Imphal Times hails from Singjamei Liwa Road. Has been with Imphal Times since its start. A National level Rugby player and  a regular Trekker and Nature Lover, loves spending time in lap of Mother Nature. Jeet is the father of two lovely kids. Jeet can be contacted at [email protected]

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1 comment

  • raj
    raj Friday, 14 June 2019 18:18 Comment Link

    Learn from CM of then undivided Andhra Pradesh, Chandrababu Naidu, how he bring revolution in IT sector. First develop infrastructure, then invite MNCs. We have pool of english educated graduates and post graduates, why to worry. They will get jobs and their living standards will increase. Need work on the ground and not lip service and come out of the mindset of "we should do things and implement programms that can be highlighted easily in press and TVs and not something that will be hard to project for advertisement".

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