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KOHIMA — Nagaland Chief Minister Neiphiu Rio on Tuesday presented an estimated INR 905.78 crore accumulated deficit budget for the fiscal year 2024-2025, which is nearly INR 500 crore less than the previous year and the lowest deficit budget tabled in seven years.
Presenting a tax-free budget at the ongoing fourth session of the 14th Nagaland Legislative Assembly (NLA), Rio, who also holds the Finance portfolio, said that the closing accumulated deficit reduced substantially from the estimated closing amount of INR 1374.17 crore in the 2023-24 Budget Estimates to INR 885.95 crore in the Revised Estimates.
“However, since the current year’s transactions are estimated to result in a negative balance of INR 19.83 crore, the year 2024-25 is estimated to close with an accumulated deficit of INR 905.78 crore,” he said.
The chief minister said that for the fiscal year 2024-25, the gross revenue receipts is estimated at INR 23978.05 crore and the gross expenditure at INR 23727.88 crore.
On increasing revenue
Addressing a press conference after presenting the budget, Rio termed the budget as “people-centric”, saying that the government has taken up new initiatives for the welfare of the people.
The state’s revenue has increased a little bit, not from the state’s source but mostly from the GST, he said, adding that it is high time to make all possible efforts to harness the rich natural resources in the state in order to increase revenue generation and bring economic benefits.
“Our State has substantial reserves of oil and natural gas, coal, multi metal bearing magnetite, limestone and dimensional building stones, including known deposits of precious minerals such as cobalt and high grade nickel as per the Indian Bureau of Mines. Despite efforts, factors like difficult terrain, poor connectivity, political reasons and land holding systems have prevented tapping of these valuable 13 resources,” he noted.
In this regard, he said the Union Minister of Mining is willing to send an expert team and machineries to the state.
However, Rio assured to have “thorough consultation” with the civil society organisations and the public before taking up the oil exploration. The government would make people “understand” that the state’s oil reserves are drained out by others, he added.
Unmanageable power crisis
“The losses in the Power sector have now reached unmanageable levels,” the CM said, adding that the revenue loss from the Power sector alone in this fiscal year (2023-24) was INR 280 crore and the loss amount is against the purchase cost of INR 595 crore, about 47% of the total power purchase.
To address the poor billing issue, he said the department is outsourcing metering and billing works for the three main revenue-intensive districts of Kohima, Dimapur and Chümoukedima.
“It is a matter of concern to see the opposition of citizens in many parts of the State to installation of pre-paid meters. A huge portion of the losses comes from the communitised sector, where revenue realised is a fraction of the actual consumption,” he stated.
Consumers in most villages use equipment and appliances that consume high amount of power but pay only a fraction of the cost. This has to be corrected to ensure that consumers pay as per actual consumption, he added.
He further said that the Third Nagaland State Finance Commission too has recommended measures to increase revenue, reduce the number of government employees and increase efficiency of the Power and Transport sectors.
Transport is another department that is running at a loss, which is projected at INR 4.37
crore in the current fiscal year, as the operational and maintenance expenditure stands at INR 12.51 crore compared to revenue collection of INR 8.14 crore, he said.
Hike in infrastructure outlay
Meanwhile, the Finance department stated that the State Plan for 2024-25 has been increased from INR 820 crore to INR 1010 crore, an increase of 23.17%. The Budget for 2024-25 has incorporated into the demands for grants state matching share to CSS amounting to INR 125.80 crore and an additional INR 125.80 crore has been kept in the common pool for allocation on need basis.
“The revenue projections of 2024-25 show a huge reduction in Non-Tax revenue as compared to the year 2023-24. This is mainly because there were huge receipts in SRE during 2023-24. During 2024-25 SRE reimbursement is expected to be less,” it added.
The deficit reduction was mainly on account of the reduction in the following liabilities – INR 368.21 crore as Backlog of CSS and INR 120.01 crore as Civil Deposit.
Life insurance scheme
Rio, in his budget, introduced a new scheme called Chief Minister’s Universal Life Insurance Scheme to provide life insurance coverage of INR 2 lakh on the demise of the breadwinner of a family due to any cause.
Additionally, accidental insurance coverage of INR 2 lakh each will also be provided for the breadwinner and three other family members. The accidental insurance component covers both disability and death and would cover every household in Nagaland. Towards this scheme, a provision of INR 15 crore has been provided in Budget 2024-25 to pay the premium cost, Rio said.
Integrated Business Hub in Dimapur
In a bid to support entrepreneurs and startups from Nagaland, an Integrated Business Hub in Dimapur will be established to serve as a Business and Innovation Centre, providing plug-and-play infrastructure to meet the demands of rapidly growing business practices, Rio said.
A Skilling Training Centre is being set up for the construction sector which will offer extensive training to the youth in the areas of construction of infrastructure, learn the use of state-of-the art tools, machinery and equipment as well as construction related skills.
Foothill Road and ILP
An amount of INR 14,850 lakh has been allocated for the Foothill Road under Special Assistance to States for Capital Investment scheme to ensure that the road becomes functional.
‘Third Nagaland State Finance Commission has submitted its report to the State Government. The Commission has recommended the formula for sharing of revenue with the Urban Local Bodies and Urban Stations and prescribed the vertical as well as horizontal formula for devolution, he said.
Rio also said that the state government is contemplating putting in place the e-stamp system to replace the present use of physical stamps for convenience in registering documents and deeds besides ensuring transparency and check evasion of stamp duty by undervaluing.
The online issue of Inner Line Permit (ILP) will be further strengthened to make the system more transparent, generate more revenue and enable the government to monitor the movement of people entering the State, he added.