Rio lists state’s fiscal problems to FC members

Dimapur, Jan. 8 (EMN): Chief Minister Neiphiu Rio on Wednesday shared with members of the Fifteenth Finance Commission some of the problems the state face due to its remote location; and the financial handicap following the change in the system of financing after 1989 when the funding arrangement put in place under the 16-Point Agreement was discontinued, according to a DIPR report.

Two members of the commission— Dr. Ashok Lahiri and Ajay Narayan Jha—arrived in Kohima on Wednesday for a two-day visit, it informed.

The chief minister also raised some issues of concern to the state such as the need for help in setting up Chiethu airport for which land has already been acquired; the importance of the foothill road for the economic development of the state.

“He also briefed the members on how the manufacturing sector has been heavily affected by the ban imposed by the Supreme Court of India on felling of timber. The chief minister also highlighted problems caused due to non-completion of road projects in the state despite the passage of many years, causing untold problems to the people of the state,” read the report.

The minister for Planning, Neiba Kronu raised concerns over the slow rate of development and the need for funds for maintenance of assets. He also expressed the problem faced by the state due to discontinuation of SPA funding, resulting in liabilities of more than INR 500 crore.

“The two members observed that the state has high revenue expenditure compared to other north-eastern states, that the level of AT&C losses in the power sector is very high, and that the entire Northeast was lagging behind in infrastructure development. Other issues discussed included Direct Benefits Transfer, PFMS, banking coverage, low CD ratio, low resource base, high revenue expenditure and decline in capital expenditure.

“Dr. Ashok Lahiri emphasised the need to focus on the agriculture sector, to harvest the abundant rainfall in the region, and to produce more so as to reduce dependence on commodities being purchased from outside the state. He also pointed out to the need to become more self-sufficient in fish and meat products. Discussions also took place on the functioning of local bodies in the state, including communitisation of public institutions,” it stated.

According to the report, Chief Secretary Temjen Toy also expressed gratitude to the favourable awards of the Fourteenth Commission. He explained the reasons for the high number of government employees; of the measures being taken to reform the Power sector in recent times.

“He also explained the measures being taken to rationalise the number of government employees by the manpower rationalisation committee and efforts towards convergence of various government sectors to make implementation of schemes more effective. He requested the commission to give due consideration to cover the revenue gap and also provide funds for state-specific needs to ensure a steady pace of development.

“The members were also informed of the difficulties faced due to poor banking coverage as well as poor network coverage hampering progress of Direct Benefits Transfer as well as access of the rural people to institutional credit. The members observed that the CD ratio was very low,” read the report.

In conclusion, both sides ‘expressed appreciation to the issues raised’, it added. The commission members expressed the need for the state government to explore more avenues to generate resources to fund its developmental activities; and the need for rationalisation of employees in order to bring down revenue expenditure and increase developmental expenditure.