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Nagaland CM Neiphiu Rio Presents Tax Free, Deficit Budget of Rs. 1374.17 cr for FY24

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Nagaland CM Neiphiu presents State Budget 2023-24On March 27, 2023, the Nagaland Chief Minister (CM) Neiphiu Rio who also holds the finance portfolio of Nagaland, presented tax free deficit budget of Rs 1,374.17 crore for the financial year 2023-2024 (FY24) at the ongoing first session of the 14th Nagaland Legislative Assembly with more emphasis on agriculture and allied sectors.

Key Points:

  • Based on the budget proposals of FY24, the Gross revenue receipts was expected at Rs 23,145.66 crore
  • Gross expenditure was about Rs 23,085.66 crore with a positive balance of 60 crore rupees.
  • FY23 transactions are estimated to result in a negative balance of Rs 40 crore.

Highlights of the Budget Allocation:

i.An allocation of Rs 82,000 lakh was made for the annual development outlay, which is an increase of Rs 4,500 lakh or 5.49% over FY23.

ii.State matching share for CSS programme:

  • Out of the above mentioned Rs 82,000 lakh core allocation, Rs 25, 000 lakh crore was earmarked for the state matching share for Centrally Sponsored Schemes (CSS) programmes to ensure the release of funds by the Union government.
  • For the first time the budget made specific highlights on the State Matching Share for all CSS under various departments (by integration with the state’s Public Finance Management System (PFMS) portal).
  • As the Union Government has made it mandatory for States to release all pending CSS before the next instalments were released.
  • Therefore the State now has to release CSS funds along with State Matching Share within 30 days failing which a penalty in the form of fine to the tune of 7% interest per annum would be charged.
  • Further, a delay in the release of CSS funds would result in a blockade of subsequent installments.
  • Due to the forced release of CSS backlog of Rs. 728 crore, the closing deficit for FY23 has been reduced by Rs. 878.57 crore from Rs. 2212.74 crore to Rs. 1334.17 crore

iii.Road and Bridge sector got the highest allocation of Rs 56.80 crore

iv.The Agriculture and allied sector has been provided with Rs 54.26 crore.

About State’s Revenue:

i.The State’s own revenue collection accounted for only 12.36% of total revenue receipts.

ii.Increase in revenue: 

  • Revenue under State GST (Goods and Services Tax), had increased from Rs 788.37 crore in FY20 to Rs 1,092.21 crore in FY22.
  • Revenue from the coal sector also increased from Rs 53 lakh in FY20 to Rs 2.03 crore in FY22.
  • The forest sector witnessed an increase in revenue collection from Rs 13.72 crore in FY20 to Rs 19.06 crore in FY22.

iii.The CM stated that the state would be impacted by the yearly reduction in the Revenue Deficit Grant (RDG) recommended by the 15th Finance Commission as over the five-year period from FY21 to FY26, the RDG was expected to reduce by Rs 910 crore.

iv.In FY23, the amount spent on power purchase was estimated to reach Rs 580.89 crore but the revenue was estimated to be around Rs 280 crore.

Further Initiatives in FY24:

The government intends to start exploration and extraction of oil in the Disputed Area Belt (DAB) once the tripartite MoU with the Centre, Nagaland and Assam is signed.

The state also proposed allowing the sale of liquor to “foreigners” visiting the state, which, is permitted within the ambit of the Nagaland Liquor Total Prohibition (NLTP) Act, 1989 by certain hotels of star category.

Note – The CM termed the FY24 budget as a balanced one.

Recent Related News:

In April 2022, The Government of India (GoI) and ADB signed a $2 million Project Readiness Financing (PRF) loan for the proposed Nagaland Urban Infrastructure Development Project.

About Nagaland:

Governor –  La Ganesan
Wildlife Sanctuary – Rangapahar Wildlife Sanctuary
Bird Sanctuary – Ghosu Bird Sanctuary