Dimapur, July 22 (MExN): The Finance department today almost categorically denied all charges of the Nagaland Congress over the issue of the Democratic Alliance of Nagaland (DAN) government’s rising loan debts. A statement from Finance Commissioner Toshi Aier explained a number of points that sought to “dispel all doubts that may exist” pertaining to borrowings of the state government.
According to the department, the charge that loan money is being spent on one-revenue generating sectors is “incorrect.” Borrowed “funds” are “generally” utilized to finance capital expenditure that are “expected to generate revenue either directly or indirectly, either immediately or in the near future,” the department said. The department also said the charge that the government is on a “borrowing spree” does not arise “because all borrowings are regulated by the Ministry of Finance and the Planning Commission as per established norms which are common for all the states.”
The government of Nagaland cannot and does no borrow funds without the approval of the central government, the Finance commissioner stated. “Loans are raised either directly from the central government or from the open market and the financial institutions only after obtaining the consent of the Ministry of Finance under Article 293 (3) of the Constitution of India,” the response stated.
“While the gross borrowings during 2009-2010 and 2010-2011 as has been reported in the media are correct, it is important to understand that the Planning commission/Ministry of Finance regulate borrowing on a ‘net’ basis that is, gross borrowing minus the repayments during the particular year,” the department said.
“The government has no clue as to how the alleged interest payment of Rs. 2144.18 crore (or Rs. 2262.18 Crore) for the year 2009-2010 and 2010-2011 has been worked out. These figures are grossly exaggerated. The actual figures of interest payment during 2009-2010 and 2010-2011 was Rs. 362.51 crore and Rs. 397.03 crore respectively.”
According to the department, the charge that loan money is being spent on one-revenue generating sectors is “incorrect.” Borrowed “funds” are “generally” utilized to finance capital expenditure that are “expected to generate revenue either directly or indirectly, either immediately or in the near future,” the department said. The department also said the charge that the government is on a “borrowing spree” does not arise “because all borrowings are regulated by the Ministry of Finance and the Planning Commission as per established norms which are common for all the states.”
The government of Nagaland cannot and does no borrow funds without the approval of the central government, the Finance commissioner stated. “Loans are raised either directly from the central government or from the open market and the financial institutions only after obtaining the consent of the Ministry of Finance under Article 293 (3) of the Constitution of India,” the response stated.
“While the gross borrowings during 2009-2010 and 2010-2011 as has been reported in the media are correct, it is important to understand that the Planning commission/Ministry of Finance regulate borrowing on a ‘net’ basis that is, gross borrowing minus the repayments during the particular year,” the department said.
“The government has no clue as to how the alleged interest payment of Rs. 2144.18 crore (or Rs. 2262.18 Crore) for the year 2009-2010 and 2010-2011 has been worked out. These figures are grossly exaggerated. The actual figures of interest payment during 2009-2010 and 2010-2011 was Rs. 362.51 crore and Rs. 397.03 crore respectively.”
