Nagaland CM presents budget outlay of Rs 23,085.66 cr

Our Correspondent
Kohima | March 28

Chief Minister Neiphiu Rio, who also holds finance portfolio today presented the Nagaland Budget for the year 2023-24 in the first session of the 14th Nagaland Legislative Assembly (NLA) in Kohima.

Presenting the budget proposals on the floor of the House, Rio estimated the gross receipts at Rs 23,145.66 crore and gross expenditure at Rs 23,085.66 crore for the financial year 2023-24. 

“We were fortunate to see an increase in our revenue receipts both under the Share of Central Taxes and Duties as well as our own revenues. This has helped us to discharge a substantial amount of liabilities in the form of CSS backlog as well as Civil Deposit,” Rio said.

As a result, the state’s closing accumulated deficit has reduced substantially from the estimated closing amount of Rs 2,212.74 crore in Budget Estimates to Rs 1,334.17 crore in the Revised Estimates. However, since the current year’s transactions are estimated to result in a negative balance of Rs 40 crore, the year 2023-24 is estimated to close with an accumulated deficit of Rs 1,374.17 crore.

Government intends to start exploration & extraction of oil
“I do not propose to raise any new taxes in this budget. However, it must be stated that there is a pressing need for us to mobilize more resources to meet our increasing developmental needs,” Rio said.

He said that the government also intends to start exploration and extraction of oil in the Disputed Area Belt (DAB) once the tripartite MoU with the Government of India and Assam is signed. 

We are concerned at the substantial loss in revenues while Assam continues to exploit the resources in the border areas to our disadvantage, Rio maintained.

Rio said that the Government shall also explore the possibility of introducing sale of its own lotteries within the state to begin with.

Gradual increase in revenues
Rio informed that the state is seeing an encouraging trend of gradual increase in its revenues in areas like state GST, which has increased from Rs 788.37 crore during the pre-pandemic year 2019-20 to Rs 1,092.21 crore during 2021-22. 

“Our revenues from the Coal sector have also seen increase from Rs 53 lakh during 2019-20 to Rs 2.03 crore during 2021-22,” he said adding that during the current financial year, it has already reached Rs 5 crore as per the latest details furnished by the department, and is expected to cross Rs 8 crore by the end of the current financial year. 

Other areas of improvements in performance include the forest sector that has seen a good increase in revenue from Rs 13.72 crore during 2019-20 to Rs 19.06 crore during 2021-22. 

Despite these encouraging trends, our own revenues still account for only 12.36% of total revenue receipts. This is barely sufficient to cover our salary expenditure for two and half months. This is mainly because we have a small tax base, the Chief Minister said.

On the other hand, Rio said, the state will be adversely impacted by the yearly reduction in the Revenue Deficit Grant (RDG) recommended by the 15th Finance Commission. 

Over the 5-year period of the award from the year 2020-21 up to 2025-26, the RDG will reduce by an amount of Rs 910 crore, he said. “It appears that the Commission has taken this view to pressurise the State to cut down its revenue expenditure, especially on salaries. The unusually huge amount of resources we spend on payment of salaries has been viewed critically by almost all the Finance Commissions,” he added.

Given these circumstances, it has become very urgent for the State to look into all potential areas of revenue generation, streamline collection systems and plug all areas of leakage. 

He said that some measures have already taken off and are in place such as PIMS and e-PayBill. The e-PayBill has already put a huge check on ghost employees and illegal appointments that were rampant in the past. 

“It has also put an end to misuse of salary provision in the budget by departments. Now unless an appointment goes through the proper process, no salary will be provided. This will also help the State Finance Department to be more accurate in providing salary provision to each department,” Rio said.

Another important initiative in the pipeline is the integration of the Grade-IV GPF with e-PayBill which is nearing completion, Rio said.

He stated that the state government also moving to computerise the State Pension Sector taking advantage of the registrations being made for the Chief Minister’s Health Insurance Scheme. 

“This will help to remove bogus and doubtful pension payments. This is urgently required considering the fact that the total pension expenditure for the year 2021-22 stands at Rs 2158.67 crore, which is a heavy burden on the State Exchequer,” Rio said.

Reducing losses in power sector
The Chief Minister said that there is also a pressing need for the state to take measures to reduce the losses in the Power sector. 

The department has so far collected Rs 260.64 crore upto the month of February 2023, out of which Rs 68.58 crore is from power trading. 

The amount spent on power purchase upto January 2023 was Rs 448.12 crore. By the end of the current financial year 2022-23, the amount spent on power purchase is estimated to reach Rs 580.89 crore while revenues may barely touch Rs 280 crore. 

The last four years have witnessed a total loss of Rs 1079.7 crore in the power sector. Such losses are unsustainable, and requires urgent corrective measures, Rio said.

Another loss making sector is the Nagaland State Transport (NST). Against the amount of Rs 12.64 crore spent on fuel alone, the department was able to collect revenue of Rs 6.50 crore only, Rio said.

“Although the Government provides bus services to the interior areas for the benefit of the public, such levels of losses cannot be sustained over a prolonged period. These are areas where we need to reduce losses and improve efficiency,” he said.

Also stressing on the need to bring down unnecessary expenditure and practice austerity in the functioning of all departments, he asked all departments collecting taxes, cess, royalties and fees to offer the facility of online payments to their customers, especially in places where there is good mobile connectivity.

“This will increase transparency, reduce delays and prevent misappropriation,” Rio said.