By Imlisanen Jamir
Nagaland’s recent plea to the XVI Finance Commission for “Capital Deficit Grants” on the surface seems to reflect the state’s uphill battle to fund essential infrastructure and services. For years, development here has lagged behind, with deep deficits in healthcare, education, and basic infrastructure. The state’s leadership is pushing for a new funding model to address these accumulated gaps—not just to fill coffers but to give Nagaland a real chance to meet the needs of its people. Or so they say.
The government’s appeal comes with specific requests that the Finance Commission has rarely, if ever, granted. As Dr. Arvind Panagariya, the Commission’s Chairman, pointed out, the proposal for capital grants is “a very new thing.” This funding approach could help Nagaland address high debt ratios and growing fiscal deficits. Without meaningful support, the state risks falling further behind, with real consequences for its social and economic stability.
At its core, the request doesn’t seem to be about “extra” funding but about fair treatment within India’s federal structure. The Nagaland Government argues that, given the unique challenges it faces, a basic infrastructure grant shouldn’t be extraordinary but necessary. The request to raise the weightage for forest cover to 15% reflects this thinking, acknowledging that Nagaland’s high level of forested land comes with economic costs that wealthier states don’t bear.
There’s also the proposal for a “disability index” that accounts for the state’s challenging terrain. Nagaland’s geography poses specific barriers to economic development, and the current funding criteria don’t capture these realities. The suggestion isn’t just about fairness; it’s a push for policies that recognize that states like Nagaland have structural challenges that other parts of India may never face.
But there’s another side to this story. While Nagaland’s case for support is strong, the government also needs to consider how effectively these funds will be used. In past years, funds meant for development have sometimes been mismanaged, misallocated, or lost in layers of bureaucracy. If the state does secure these grants, they must come with transparency and accountability mechanisms. The resources could be a lifeline for many communities, but only if they make it to the projects and services where they’re needed.
Nagaland’s proposal to the Finance Commission is a call to rethink how states with unique needs and difficult economic realities fit into India’s funding model. This isn’t about asking for special favors but about pushing for a fairer system that doesn’t leave states with fewer resources to carry a disproportionate load. The success of this appeal could reshape how states like Nagaland are supported, setting a precedent for a more equitable approach to development across India.
Comments can be sent to imlisanenjamir@gmail.com
