Nagaland: INR 13.14 cr. collected from Covid-19 cess; Central funds reduced

Dimapur, Sep. 23 (EMN): The Finance department on Wednesday informed that the government of Nagaland had decided to roll back the Covid-19 cess of INR 5 per litre on diesel and INR 6 per litre on petrol and other motor spirits, which was levied from the midnight of April 28 to meet the financial exigencies arising out of the novel coronavirus pandemic.

While informing the decision through a press release, the department also stated that the state Cabinet discussed the matter and felt the need to let the public know about the financial issues that are confronting the state, and the likely impact it will have on the government’s activities.

It informed that funds from the Central government to the state have reduced, “especially our share in the taxes and duties” due to the lockdown, which has shrunk the country’s economy during the period April-June 2020 by -23.9%.

‘The state government had initially estimated monthly receipts of INR 320.96 crore per installment as share of central taxes and duties, the figure that was reflected in the Union Budget of 2020-21. However, actual receipts were only INR 263.80 cr. This resulted in a monthly deficit of INR 57.16 cr. This amount has again reduced to INR 240.47 cr. since June 2020. Accordingly, the monthly deficit has now risen to INR 80.49 cr.,’ the statement read.

‘The total deficit during 2020-21 on account of shortfall in receipts of share of central taxes and duties alone comes INR 1080.13 cr. The negative impact is not confined to Central Receipts only. Our own revenues have fallen by about INR 38 crore a month below the budgeted amount during the period April-August 2020,’ it added.

The Finance department stated that the revenue receipts of the state are likely to witness a decline of INR 1650 cr. during 2020-21 against the budget. It said that deficit stood at INR 950.09 crore when the present chief minister handed over the reins of the government in 2013-14 but it rose to INR 1607.73 cr. when the present government took over in 2018.

“The current year 2020-21 is expected to close with a deficit of INR 2358.81 crore as per budget estimates and this includes an increase of INR 939 crore since 2014-15. This is mainly due to various factors such as implementation of the last pay revision for the state government employees and payment of pending dues and liabilities to contractors following various court judgments in their favour, leaving the government with no alternative but to pay,” it stated.

While providing a brief statement of the currently monthly receipts and expenditure, the department said that the year is expected to close with a much higher deficit than estimated because of the pandemic.

The statement said that the government was compelled to take drastic measures including “prorata cuts in the budgets of the departments, imposition of various austerity measures and mobilisation of additional resources through imposition of Covid-19 cess” to mitigate the negative effects of the fall in receipts to avoid a potential collapse, caused by the pandemic.

It has also furnished the details of funds received from the Central government for Covid-19, amounts spent by the state from its own resources and the amount collected as covid-19 cess to the public.

Details of funds for Covid-19:

• Total amount received from GOI for Covid-19: INR 27.84 crore
• Total amount spent from State’s resources for Covid-19 till date: INR 115.80 crore
• Total Covid-19 cess collected from April to August 2020: INR 13.14 crore.

The state government has appealed to the citizens “to refrain from making sweeping statements based on hearsay without ascertaining facts” and to avoid resorting to activities that will restrict the government to effectively respond to the pandemic, as the fight against it is “far from over”.

“Efforts should be made to ascertain correct facts through proper means about the total amount given to the Government of Nagaland for Covid-19 purposes from the Central government before raising the issue in the public domain,” the press release read.

The government has also clarified the reports claiming that the funds sanctioned “by the Ministry of Finance as Revenue Deficit Grant and State’s Share of Union Taxes are meant for fighting the Covid-19 pandemic”, saying that it is meant to meet various types of recurring expenditure such as salaries, pensions, debt servicing etc. “These releases are receivable even in the absence of the pandemic. Therefore, the contention of getting extra funds does not arise,” it added.

The Cabinet was of the opinion that Centre’s fund should be supplemented by the revenue from within the state to cover the expenditure of the state government, citing taxes paid by the citizens of India to run the country.

“No society can sustain itself on the belief that all facilities should be made available to the public without any responsibility on the part of the citizens. Like the rest of the world, we need to learn to pay taxes and acquire a sense of responsibility and accountability towards building of our nation and our economy through our contributions,” it stated.