Chart based on figures given by Chief Minister Dr Neiphiu Rio in the Budget Speech 2025-26 in the Nagaland State Legislative Assembly on March 6. The percentages are rounded off.
76p goes to non-developmental expenses
Moa Jamir
Dimapur | March 6
Nagaland's financial health has shown gradual improvement in recent years, yet the State continues to rely heavily on the Union Government, with most of its expenditure directed towards non-developmental purposes, according to an analysis of the estimated receipts and expenditures for the Budget 2025-26.
Chief Minister Dr Neiphiu Rio, who also holds the finance portfolio, presented the Nagaland Budget for 2025-26, projecting gross receipts at Rs 24,849.01 crore and gross expenditure at Rs 24,699.01 crore, leaving a surplus of Rs 150 crore for the current year’s transactions.
However, after accounting for an outflow of Rs 150 crore under the Public Account, which includes provident funds, small savings, and reserve funds, the Net Current Transactions were balanced at Rs 0.00.
Despite this, the State’s accumulated negative balance means the financial year 2025-26 is estimated to close with a deficit of Rs. 843.21 crore. This marks a notable reduction compared to previous years — from Rs 2,212.74 crore in 2022-23 to Rs 1,334.17 crore in 2023-24 and Rs 843.21 crore in 2024-25 (RE).
Nevertheless, a significant portion of the State’s revenue still comes from external sources, while a majority of its expenditure is directed towards non-productive sectors.
The Morung Express gives a lowdown on how each rupee is ‘earned’ and ‘spent’ in Nagaland.
Where does each rupee come from?
Out of every rupee Nagaland receives, only around 10 paise is generated internally through the State’s Own Tax and Non-Tax Revenue.
For 2025-26, internal revenue is estimated at Rs 2,472.13 crore out of the total gross receipts of Rs 24,849.01 crore — approximately 10% of the total revenue.
The largest share comes from Central Assistance (Grants & Loans), projected at Rs 8,216.25 crore, accounting for 33 paise of every rupee received.
Similarly, the State’s Share in Central Taxes contributes 33 paise, amounting to Rs 8,093.7 crore.
Market borrowings, including Ways and Means Advances (WMA) from the Reserve Bank of India (RBI), make up 24 paise, with an estimated Rs 6,065.41 crore in 2025-26.
Receipts from 'Recovery of Loans and Advances' are negligible, at just Rs 1.52 crore.
In summary, around 90 paise of every rupee received comes from external sources, with nearly half of it tied to liabilities.
Where does each rupee go?
For every rupee spent by the Nagaland Government, an estimated 76 paise goes towards non-developmental expenditure and debt servicing, leaving just 24 paise for developmental activities.
Developmental expenditure reflects a government’s commitment to welfare-oriented policies. However, Nagaland’s capacity to invest in development is constrained by the conditional nature of its revenue sources.
Of the total projected expenditure of Rs 24,699.01 crore in 2025-26, Rs 18,879.77 crore is earmarked for non-developmental expenditure and debt servicing, translating to 76 paise per rupee spent.
Funds allocated for developmental activities, including those under Centrally Planned Schemes (CPS) and Centrally Sponsored Schemes (CSS), amount to Rs 5,819.24 crore — or just 24 paise of every rupee spent.
While the budget speech did not provide specific details about non-developmental expenditure, the 'Explanatory Memorandum' presented alongside the budget indicated that Rs 11,400.81 crore is allocated for salaries, wages, and pensions.
Despite the heavy dependence on external funding, the State’s internal revenue generation has shown slight improvement — rising from 9 paise per rupee last year to 10 paise this year.
