Nagaland Budget 2023-24: Chief Minister Rio Presents Lowest Deficit Budget In 6 Years - Eastern Mirror
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Nagaland budget 2023-24: Chief Minister Rio presents lowest deficit budget in 6 years

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By Reyivolü Rhakho Updated: Mar 27, 2023 11:00 pm
CM and Minister in Charge presents Budget for 2023 2024
Neiphiu Rio presenting state budget for the financial year 2023-2024 at the NLA Secretariat in Kohima on Monday. (DIPR)

Kohima: Nagaland Chief Minister Neiphiu Rio on Monday presented an estimated accumulated budget deficit of INR 1,374.17 crore for the financial year (FY) 2023-2024 from a total outlay of INR 23,085.66 crore, reflecting the lowest deficit budget tabled in six years.

Presenting a tax-free budget at the ongoing first session of the 14th Nagaland Legislative Assembly (NLA), Rio, who is also the minister in-charge of Finance, said the closing deficit for the year 2022-23 has been reduced by INR 878 crore from the closing estimate of INR 2212.74 crore against INR 1334.17 crore for 2023-24.

An increase in the revenue receipts both under the share of central taxes and duties as well in the state’s own revenues has helped in discharging a substantial amount of liabilities in the form of centrally-sponsored schemes (CSS) backlog as well as civil deposit, said CM.

 “As a result, our closing accumulated deficit has reduced substantially from the estimated closing amount of INR 2,212.74 crore in Budget Estimates to INR 1,334.17 crore in the Revised Estimates,” he said.

However, as the current year’s transactions are estimated to result in a negative balance of INR 40 crore, FY 2023-24 is estimated to close with an accumulated deficit of INR 1,374.17 crore, he added.

The chief minister said the estimated gross receipts for the current financial year stands at INR 23,145.66 crore and gross expenditure at INR 23,085.66 crore.

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Overview of state’s financial health

Addressing a press conference after presenting the budget, Rio said the state budget position was “never good” with the change in the financial pattern after 1989 pushing the state out of its “comfort” zone, prior to which the consolidated fund of India helped maintain a zero deficit.

When the state was recovering from the pandemic-induced lockdown which caused “damage” to the state finances, the financial tension of the state reached its peak in July 2022, said Rio.

‘The ministry of Finance gave ultimatums to states to release the unspent centrally sponsored schemes, to which the state released INR 728 crore. The amount was so high that the state was forced to withdraw funds from the Consolidated Sinking Fund to manage these releases. A positive outcome of this episode is that the state government was able to discharge almost all the backlog of CSS. This also helped to reduce the accumulated deficit by a huge amount. But because the state is improving does not mean it has got extra money,’ he said.

‘For the fiscal year 2023-24, the state is anticipating an increase of INR122 crore over the previous financial year 2022-23 in Own Tax Revenue. This is mostly due to measures to improve efficiency and transparency and plug areas of leakage. Under ‘Share of Central Taxes’, the budget reflects an increase of INR 412 crore during 2023-24 over the Revised Estimates of 2022-23,’ Rio continued.

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Neiphiu Rio along with others during press conference after the budget presentation on Monday. (EM Images)

Power department contributes to INR 300 crore shortfall

Informing that there are some “very bad” performing departments including Power, which has a shortfall of about INR 300 crore, he said this is due to transmission loss, power thefts, etc., and that one department alone contributing to INR 300 crore loss is a huge thing, and therefore, the government is trying to improve the situation.

Lamenting the land issue in Nagaland, which he said is hampering developmental activities, the CM cited one instance wherein locals did not allow the water level to rise to the required amount when the dam was constructed at the Doyang River, thus reducing power generation.

‘The Power department has so far collected INR 260.64 crore till the month of February 2023, out of which INR 68.58 crore is from power trading. The amount spent on power purchases up to January 2023 was INR 448.12 crore. By the end of the current financial year 2022-23, the amount spent on power purchase is estimated to reach INR 580.89 crore while revenues may barely touch INR 280 crore. The last four years have witnessed a total loss of INR 1079.74 crore in the power sector. Such losses are unsustainable, and require urgent corrective measures,’ he said.

Another loss-making sector is Nagaland State Transport, he said. ‘Against the amount of INR 12.64 crore spent on fuel alone, the department was able to collect revenue of INR 6.50 crore only. Although the government provides bus services to the interior areas for the benefit of the public, such levels of losses cannot be sustained for a prolonged period. These areas need to reduce losses and improve efficiency.’

Rio also stressed on the need to bring down unnecessary expenditures and practice austerity in the functioning of all departments. He urged the departments collecting taxes, cess over royalties and fees to offer the facility of online payments to their customers, especially where there is good internet connectivity, which will increase transparency, reduce delays and prevent misappropriation.

‘During the financial year 2023-24, the government is doing away with the austerity measures in view of the improved financial position. The State Cabinet will take a decision on whether to continue the ban on vehicle purchases,’ he informed.

The CM also expressed hope that the financial position of the state will continue to improve.

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By Reyivolü Rhakho Updated: Mar 27, 2023 11:00:51 pm
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