Source: Chart based on Government of Nagaland, ‘Budget Speech for 2023-24’ and ‘Explanatory Memorandum to the Budget for the Year 2023-24.’
Moa Jamir
Dimapur | March 31
The financial health of Nagaland State has improved marginally, however, for every rupee it receives, still around 92 paise comes either from outside or via borrowings.
On the other hand, for every rupee that goes out the government’s hand, an estimated 82 paise is spent either on non development expenditure or servicing of debts, leaving just 18 paise for developmental works.
These are some facets of the State’s economy reflected in the Nagaland Budget 2023-24 presented by the Chief Minister and Minister-in-charge of Finance Neiphiu Rio on March 27 in the State Assembly.
The maiden budget on the floor of the newly constituted 14th NLA estimated gross receipts at Rs 23,145.66 crore and gross expenditure of Rs 23,085.66 crore for the financial year 2023-24, reflecting a surplus of Rs 60 crore. However, with Rs 100 crore for public accounts, the current year’s transactions of was estimated to close at (-) Rs 60 crore.
Nevertheless, one notable feature of the budget was the substantial cut in accumulated budget deficit by over 39% from the estimated Rs 2212.74 crore in 2022-23 to Rs. 1334.17 crore 2023-24.
The cut of Rs 878.57 crore was attributed to an increase in the revenue receipts both under the share of Central Taxes and Duties as well as State’s own revenues.
The State Assembly passed the budget via a voice-vote the next day.
With a new financial year in Nagaland and across India starting from April 1 and setting in motion of new policy changes, particularly those announced during the budget, The Morung Express gives a lowdown on how each rupee is ‘earned’ and ‘spent’ in Nagaland.
How a rupee is earned
As per the Nagaland Budget 2023-24, for every rupee the State Government receives, 0.35 paisa is estimated to be contributed by Central Assistance (Grants & Loans), while over 0.31 paise is expected to be earned from Internal Debts, including WMA from the Reserve Bank of India.
The WMA (Ways and Means Advances) from the RBI is a short-term loan to tide over temporary financial requirement.
The Internal Debt and Central Assistance to Nagaland stood at Rs 8050.63 crore and Rs 7330.91 crore respectively as per the 2023-24 budget document and both collectively contribute over 0.66 paise to every rupee the State earns.
Meanwhile, another contribution from outside was the State's Share in Central Taxes which was estimated at Rs 5812.05 crore or around 25 paise.
Accordingly, for each rupee accruing to the Nagaland Government, around 92 is estimated to come from outside.
Meanwhile, as noted by the Chief Minister, the State’s Own Tax and Non-Tax Revenue increased from an estimated Rs 1708.11 crore in 2022-23 to Rs 1950.56 crore in 2023-24.
As a result, the contribution from within the State increased marginally from around 7 paise to 8 paise in the current financial year.
Another Rs 1.51 crore (or 0.00014 paise) is attributed to ‘Recovery of Loans and Advances by the State Government.
How a rupee is spent
Money spent on developmental activities and provision of services are healthy signs of welfare oriented polices of any government.
However, the Nagaland Government’s spending is hindered by the various conditions by which it earns its each rupee.
As a result, out of every rupee the State Government spends, 50 paise goes for non-developmental expenditure while another 32 paise is spent on servicing of debts.
Accordingly, out of the total estimated expenditures of Rs 23,085.66 crore in 2023-2, Rs 18817.93 crore is estimated to be spent on non-developmental expenditure and servicing of debts.
This translates to around 82 paise for each rupee spent by the Nagaland Government.
The funds left for Development Expenditure, including those received for Centrally Planned Schemes (CPS)/Centrally Sponsored Schemes (CSS), hence, stood at just Rs 4168.63 crore.
In other words, out of every rupee expense the Nagaland Government plans to incur, just around 18 paise would go for developmental activities.
Incidentally, allocation for development activities was much higher in 2022-23 Budget when a total of Rs 5815.13 crore was allocated. The share in each rupee, thus, fell from 24 paise last year to 18 paise in the current year.
Most borrowings, as per the ‘Explanatory Memorandum’ were in the form of the WMA from the RBI at Rs 5500 crore, followed by Rs 1773.86 crore from the open market.
A bulk of the non-developmental expenditure of the Nagaland Government is estimated to be spent on Salaries & Wages (Rs 7186.90 crore), Pensions (Rs 3082.26) and interest payment (Rs 1142.58 crore).
