State financial position was never good: Nagaland CM

Morung Express News
Kohima | March 28

Chief Minister and Minister-in-Charge of Finance, Neiphiu Rio said the state financial position was never good after 1989 when the financial pattern has changed. 

Comparatively, the budget for 2023-2024 has reduced the deficit from Rs 2212.74 crore in 2022-2023 to Rs 1334.17 crore showing a reduced amounting to Rs 878.57 crore of accumulated deficit. Rio described the 2023-2024 budget as ‘very balanced budget’ targeting the agri-allied, micro farmers and entrepreneurs etc.

Addressing media persons following the presentation of the budget speech, Rio explained that prior to 1989 even if the state ran into deficit; it used to be made up by the consolidated fund of India wherein every financial year starts with zero deficit. However, he added that ‘but that comfort is no more there.’

Explaining further, he said that a budget is an estimate and cannot be accurate when it is presented and whatever excess is spent becomes deficit. Good budget, he said is ‘when you can make a gross estimate of the receipt and expenditure.’ 

Rio said the year 2022-23 started with a very uncertain note because the pandemic had affected not only India, but the whole world which has drastically reduced the state shares of central taxes and duties, and also state own revenue went down due to non activities.

‘We were panicky but we could sustain and have taken up a lot of austerity measures,’ said Rio while adding that the government has even stopped appointment against the vacancies and ‘through that, we have sustained a little bit.’

While the state is recovering, he said that it reached its financial tension peak in July 2022 and got into a very serious problem following the ultimatum from the Ministry of Finance to all the states to release all the Centrally Sponsored Schemes (CSSs) which were not spent, inclusive of the state shares of 10% amounting to Rs 728 crore.

‘Out of the deficit, we have to release as if we don’t release we face a penalty of 7% interest,’ Rio said. Nonetheless, he maintained that the state has been able to clear all the CSS backlogs which were kept in the CDs.

The state own revenue increased by Rs 145.50 crore, Rio informed, adding that it has helped the government to tide over. He also informed that the state will try to tap into areas where it can get some revenue as the state’s tax base is very limited.

‘It was a big challenge but we were successful,’ he remarked while quickly adding ‘just because we are improving doesn’t mean we have extra money.’

Citing the 15th Finance Commission 5-year period of the award from the year 2020-21 up to 2025-26 which recommended for yearly reduction in the Revenue Deficit Grant by an amount of Rs. 910 crore, Rio said the state has to fulfil and perform accordingly.

He informed that state finance department got an appreciation from the Ministry of Finance for their financial management for being able to clear all CSS backlogs, CDs and following the PFMS. ‘We hope to continue to improve’ said Rio.

Chief Minister said that the state had really bad performance department, particularly mentioning the power department, which alone is contributing to about Rs 300 crore deficit.

‘The shortfall between purchase of power and the revenue collected is going to be about Rs 300 crore,’ said Rio however adding that the deficit would have increase but the equation has been check owing to the increase of more revenue.

The last four years have witnessed a total loss of Rs 1079.74 crore in the power sector, he informed.

On opposition-less government

While the various political parties who have extended letters of support to the government are in confusion as to whether they are in the opposition or with the ruling government, Rio said he has welcomed their support.

On being asked, he said ‘they have given their letters of unconditional support and for me, I have welcomed their support.’ Although its alliance partner’s ‘High Command’ has no issue with the support, it has been suggested for further discussion, Rio informed.

“It is still in discussion and I will sit with our alliance BJP, and till that time, this system is okay,’ said Rio. He said the letters of support have been submitted to Raj Bhavan and the Assembly Secretariat as well.

Meanwhile in his budget speech today, Rio has appreciated all represented political parties namely, NCP, NPP, LJP, RPI, NPF and Independent except JDU. Citing this as a ‘lapse’ from his end, Rio said he explained this to the JDU which will be formally replied later.

On ULB issue

On the ongoing contentious issue to the Urban Local Bodies election, Rio asserted ‘we are not exempted that’s why we have to face election.’

Clarifying the statement issued by the Nagaland Gaon Bura Federation, he said the 73rd Amendment related to Rural Local Bodies (Panchayati Raj) while the 74th Amendment is for municipal and town councils.

Citing the March 9, 2022 consultative meeting held all tribal hohos, apex bodies, political parties and prominent NGOs leaders, senior citizens and others to discuss on ULB election, women reservation and property, who according to Rio has ‘supported and signed.’

“In that, we have come to an understanding that we will remove the property tax while we cannot do away with women reservation,” Rio maintained.

“There was no reservation for chairperson. Reservation is only for tribal and women, but there is no percentage mentioned in the original, in the Municipal law. But that amendment in 2016 has come in. So we made a mistake and therefore, public has also reacted. We thought we will amend also if people want but this time the complain came out that including Article 371 (A), demanding repeal of 74th amendment and so it is no point for us to amend of deleting the property tax or deleting the percentage for chairperson because their demand is in toto, not against 371 A and straight demand of repealing the law and do everything afresh (Sic),” Rio said.

He also stated that the ULB issue cannot be debated inside the house as it is only directing the Supreme Court’s order to notify. “We are asked to see that the notification is fully implemented and no organisation or citizen of the state shall not obstruct or create problem, if so it will be a breach of the Supreme Court’s order,” Rio stated.

“As chief minister of the state, let me tell you that we are following the SC order, but if the tribal hohos, CSOs and public don’t want, the state government is not prepared to physically fight with them like before in 2017,” said Rio.

When queried on the NSCN (IM)’s objection to holding of the ULB polls on Naga Plebiscite Day, May 16, Rio said, “I have no comment, their issues are different, state business is different.”