GSDP rises to ₹59,626 crore, but revenue receipts fall 4.58% as central grants decline sharply
Shillong (Economy India): Meghalaya’s economy recorded strong growth in 2024-25, with the state’s Gross State Domestic Product (GSDP) increasing 12.03%, significantly faster than India’s GDP growth of 9.78% during the same period, according to the Comptroller and Auditor General of India (CAG).
The findings were highlighted in the CAG’s State Finances Audit Report, which was tabled in the Meghalaya Assembly on August 28. Meghalaya’s GSDP increased from ₹53,223 crore in 2023-24 to ₹59,626 crore in 2024-25.
Meghalaya’s economy expands strongly
The 12.03% growth in GSDP indicates a strong expansion of economic activity in the northeastern state during FY25. The pace of growth was higher than the 9.78% growth recorded by the Indian economy during the year.
The increase in GSDP comes against the backdrop of continued efforts to strengthen economic activity and development in the state.
However, the CAG report also points to challenges on the fiscal side, particularly concerning Meghalaya’s revenue receipts and dependence on transfers from the Centre.
Revenue receipts decline 4.58%
Despite strong economic growth, Meghalaya’s total revenue receipts declined by 4.58%, falling from ₹17,977.86 crore in 2023-24 to ₹17,153.91 crore in 2024-25.
The major reason for the decline was a sharp reduction in grants-in-aid received from the Centre.
Economic and fiscal figures
| Indicator | 2023-24 | 2024-25 | Change |
|---|---|---|---|
| GSDP | ₹53,223 crore | ₹59,626 crore | +12.03% |
| Revenue Receipts | ₹17,977.86 crore | ₹17,153.91 crore | -4.58% |
| Central Grants | ₹5,574.86 crore | ₹3,336.37 crore | -40.15% |
| Own Revenue | — | ₹3,947.14 crore | +5.54% |
| State’s Share of Union Taxes | — | ₹9,870.40 crore | +13.93% |
Source: CAG State Finances Audit Report, as reported on August 30, 2026.
Central grants fall 40.15%
The CAG highlighted a significant 40.15% decline in grants-in-aid from the Centre.
Central grants fell from ₹5,574.86 crore in 2023-24 to ₹3,336.37 crore in 2024-25, the lowest amount received by Meghalaya in five years, according to the report.
The sharp fall in grants had a direct impact on the state’s overall revenue receipts.
Higher tax share provides some relief
The decline in central grants was partly offset by an increase in Meghalaya’s share of Union taxes and duties.
The state’s share rose 13.93% to ₹9,870.40 crore during 2024-25.
At the same time, Meghalaya’s own revenue, comprising tax and non-tax revenue, increased 5.54% to ₹3,947.14 crore.
However, non-tax revenue declined 9.40%, from ₹523.25 crore to ₹474.08 crore.
Meghalaya remains dependent on central transfers
One of the key concerns highlighted by the report is Meghalaya’s continued dependence on central transfers.
Central transfers accounted for 76.99% of the state’s total revenue receipts in 2024-25, while the state’s own resources contributed 23.01%.
This indicates that despite the strong expansion in the state economy, Meghalaya continues to have limited fiscal autonomy and remains substantially dependent on funds transferred from the Centre.
Revenue mobilisation needs to keep pace with growth
The CAG also pointed to a gap between Meghalaya’s economic growth and its ability to generate revenue.
The state’s revenue receipts-to-GSDP ratio declined from 33.78% in 2023-24 to 28.77% in 2024-25.
The audit report observed that the growth in Meghalaya’s own tax revenue has generally remained below the pace of GSDP growth.
This suggests that stronger economic activity has not yet translated proportionately into higher state-generated revenues.
CAG recommends stronger revenue mobilisation
The CAG recommended measures to improve Meghalaya’s fiscal position, including broadening the tax base, strengthening compliance and improving collection efficiency.
Improved revenue mobilisation could help the state reduce its dependence on central transfers and create greater fiscal space for infrastructure, public services and development programmes.
Strong growth, but fiscal sustainability remains a challenge
Meghalaya’s FY25 performance presents a mixed economic picture. On one hand, the state economy grew at a robust 12.03%, comfortably exceeding the national growth rate of 9.78%.
On the other hand, declining revenue receipts, a sharp reduction in central grants and continued dependence on central transfers underline the fiscal challenges facing the state.
Going forward, maintaining the growth momentum while strengthening own-source revenue mobilisation will be critical for Meghalaya to achieve more sustainable and financially resilient economic development.
(Economy India)
