Yet again, the government of Nagaland has presented a deficit budget for the financial year 2024-25, but this wasn’t unexpected as the state has been overwhelmed by an accumulated deficit for years now. What catches the eye is the government’s attempt to narrow the gap between expenditure and income over the past few years. The Rio government tabled an accumulated INR 905.78 crore deficit budget earlier this week, the lowest deficit budget in seven years, compared to INR 2212.74 crore in 2022-23 and INR 1374.17 crore in 2023-24, thanks to a substantial reduction of the revised estimate by over INR 800 crore in both financial years. The total outlay for FY 2024-25 is INR 23,727.87 crore, while the estimated receipt is INR 23,978.04 crore, showing a surplus of INR 250.17 crore. This indicates that the incumbent government is consciously trying to limit spending despite the need to invest in various sectors, from roads to healthcare to education. Such small but significant steps towards consolidating the fiscal by reducing the deficit are vital for the state’s long-term economic health. It’s a move in the right direction, an encouraging one, after being caught in the deficit trap due to reckless spending and disruption caused by the recent COVID-19 pandemic. And going by the current trend, there are possibilities of the state overcoming the deficit burden in the next 2-3 years. To get there, the state government should stick to its fiscal consolidation goal.
The highlights of this year’s budget, however, are the Chief Minister’s Universal Life Insurance scheme, being introduced with an aim to provide a coverage of up to INR 2 lakh on the demise of the breadwinner of a family, for which INR 15 crore has been allocated, and the provision for construction of the Foothill Road, for which INR 148.50 crore has been allocated. For a revenue-starved state like Nagaland, any welfare policy should be welcomed. With the development outlay being increased to INR 1010 from INR 820 crore in the previous year, an increase in fund allocation has been witnessed in almost all the sectors. However, the decrease in outlay for the Health sector is disappointing, as access to quality healthcare services is still a far cry for people in rural areas. The interior region of the state needs hospitals with state-of-the-art equipment and enough manpower, besides community health centres. Schemes without facilities won’t make the desired impact.
It is also important to note that a chunk of the state’s expenditure goes towards non-development activities, especially salaries of government employees, which is estimated at INR 7277.61 crore for the upcoming fiscal year, while INR 3557.05 crore is estimated to go towards pension. Power and Transport sectors, too, have been straining the state’s exchequer for years. It’s time the government take concrete measures to transform liabilities into assets through reforms, including penalisation of defaulters and the use of modern tools to minimise loopholes in the billing process. The government should do everything in its power to avoid falling into a deficit trap again, as any move that will eat into the development outlay will have a cascading effect on the growth of the state. The citizens,too, should play their part towards realising this by diligently paying for the services they avail and facilitate development activities. Nothing comes free in life.
