Nagaland Assembly passes budget for Year 2022-23

Nagaland

The Nagaland Assembly on Thursday passed the Rs 24,239.96 crore budget for the 2022-23 financial year by voice vote.

Chief Minister Neiphiu Rio presented a tax-free deficit budget in the Nagaland Legislative Assembly, amounting to INR 2212.74 crore for fiscal year 2022-23, reducing the shortfall of INR 466.72 crore from last year’s initial estimated negative balance.

The current year’s transactions for 2022-23 are estimated to result in a positive balance (surplus) of INR 150.30 crore, CM Rio said and termed the surplus as an “achievement”.

However, because of the negative opening balance of INR 2363.04 crore, 2022-23 is estimated to close with a negative balance of INR 2212.74 crore, he said presenting his Budget speech on the floor of the house on Tuesday.

CM Rio, who is also the Minister-in-Charge for Finance, estimated the gross receipts at INR 24389.80 crore and gross expenditure at INR 24239.50 crore for the financial year 2022-23.

In the last financial year 2021-22, CM Rio tabled a negative balance of INR 2679.46 crore. Positively, the growth in the country’s economy and the state’s share of Central taxes have been increased in the revised estimates of the Union Budget by INR 547.10 crore in the current year.

Nagaland’s own revenues are also estimated to improve by INR 42.45 crore. In view of these improvements, 2021-22 is estimated to close with a deficit of INR 2363.04 crore as against the earlier estimate of INR 2679.46 crore in the Budget estimate.

Elaborating on the surplus balance this year, he said that austerity measures taken to address the receipts shortfall mainly caused by Covid-19 pandemic enabled the government to fulfill most of the budgetary commitments. Alongside the austerity measures, the increased receipts in the share of Central taxes as well as improvements in state’s own revenue receipts helped witness improvements in the state’s finances, he said. 

However, in view of the huge losses incurred during the last two years, it has become necessary for the state to continue with the austerity measures to help stabilise the finances.

Accordingly, the austerity measures were incorporated in the budget of 2022-23 as well, CM Rio added.

Further, the Nagaland government took various measures to enhance the state’s own revenues and resources. It proposed enhancement of rates, fees and duties, including measures to enhance efficiency in the departments of Power, Water Supply, Stamps, Transport, Geology and Mining, Forests and Environment, Land Revenue, State Transport, PWD (Housing) and State Excise.

The State Cabinet has already accepted the recommendations, and instructions have been issued to departments concerned to put the new measures in place, he informed.

“It is also actively exploring the guarantee route to help access funds outside of the budget to fund critical developmental and infrastructure activities to supplement our limited resources. A Special Purpose Vehicle (SPV) is being formed for this purpose,” he added.

The government has also created a comprehensive database for its employees called Personnel Information Management System (PIMS).

‘This initiative will help to ensure that we have real time data of all categories of government employees, including personal data such as date of entry into service and date of retirement. This database will also form the basis for budgetary allocation to various departments for salaries and wages. It will help to put a check on illegal and excess appointments beyond the sanctioned strength which is becoming a widespread problem’, he added.

‘In addition, the State Finance department has recently introduced the e-Pay Bill at the DDO level to ensure that salaries are prepared as per actual staff strength as reflected in the PIMS database. Eventually, the e-Pay Bill will help the State Finance department to get real time data on cash outgo and check fraudulent payments and other financial malpractices that are frequently being reported by the Comptroller and Auditor General of India. These measures will go a long way in bringing about transparency and accountability, and prevent malpractices and leakage of public funds’, CM Rio said.

Addressing a press conference after the budget presentation, CM Rio pointed out why the state budget is getting so much money.

‘ Nagaland is overstaffed. Out of the receipts, salary and wages alone eats up 55.15%, pension 20.83%, debt servicing 8.28%, purchase of power 3.72%, maintenance 1%, Grant-in-aid to public service undertakings 0.50%, others (investments, scholarships, office maintenance etc) accumulates to 8.59%. The percentage total comes to about 87% leaving less than 20% for developmental activities,’ he informed.

He said that GST improved financial health by imposing tax on heavy machineries.

‘After Covid-19 pandemic, there is a purchase of heavy machineries where in 50% goes to the central and 50% to state, which helped improve the consumers’ state including Nagaland,’ he added.

CM Rio also said that there is an improvement in revenue generation from Power from last year.

Power loss has come down to 50% and is expected to improve further with pre-paid metering in place. Otherwise, power theft is “very alarming” in the state, he said and added the gap between expenditure and revenue was INR 270 crore (loss) in 2021 and INR 275 crore in 2020.

 

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