Outstanding liabilities of the State @Rs 86 Billion
Moa Jamir
Dimapur | June 24
Nagaland State gross fiscal deficit soared from Rs 1 Billion in 1991-92 to Rs 11.6 Billion (eleven thousand six hundred crores) in the fiscal year (FY) 2015-2016 as per the data released by Reserve Bank of India (RBI) on June 24.
It is the highest fiscal deficit in 16 years of Nagaland state, as covered by RBI data. Since 1991, the State had only one surplus fiscal year in 2003-04.
However, as per the advance budget estimate, the fiscal deficit is expected to decrease to Rs 5.4 Billion (Rs 5400 crores) in FY2016-17.
Overall, the second edition of RBI’s statistical publication titled ‘Handbook of Statistics on States 2016-17’ reported a hike in the gross fiscal deficit of all the states of India, surging from a Rs 187.9 Billion in FY1991 to Rs 4495.2 Billion in FY2016.
The State with the highest deficit was Rajasthan at Rs 673.5 Billion followed by Uttar Pradesh at Rs 643.2 Billion.
The gross fiscal deficit (GFD) shows the excess of total expenditure including loans net of recovery over revenue receipts (including external grants) and non-debt capital receipts.
Surging liabilities
The rise in fiscal deficit is also indicative of two deteriorating situation in the economy - a growing revenue deficit as well outstanding liabilities As per the data, Nagaland had total outstanding liabilities of Rs 4.09 billion in March 31, 1991. By March 31, 2017 the liabilities had skyrocketed to Rs 86 Billion (Rs 86,000 crores).
The amount, however, includes State Development Loans (SDLs) of Rs 61.9 Billion. SDLs are loans raised by State Governments in the market via RBI by issuing securities.
Consequently, the revenue deficit in the State has also seen an increase from Rs 0.1 billion in FY1990-91 to as high as Rs 8.9 Billion in FY 2014-15.
While, it decreased significantly to Rs 2.1 billion in FY2015-16, it is expected to soar to Rs 9.0 billion in FY2016-17, according to the advance budget estimate.
Revenue deficit occurs when the actual amount of revenue (income) received or the actual amount of expenditures do not correspond with predicted revenue and expenditure figures.
From FY 1992-93 to FY2002-03; Nagaland was more or less a revenue surplus state, but since then, the state has seen constant increase of deficits with the highest estimated for FY2016-17.
According to RBI, the Handbook of Statistics, first released in 2016, is aimed at providing State-wise statistics on a wide range of features of the regional economy of India viz., social and demographic characteristics, state domestic product, agriculture, industry, infrastructure, banking and fiscal developments. This second edition has updates of the existing data series and improvement in coverage of infrastructure.
