Nagaland’s estimates closing deficit of Rs 2358.81 cr

Table showing estimated revenue receipts and expenditure of the Nagaland for the current fiscal 2020-21 as provided by the State’s Finance Department on September 23. (Morung Graphic)
Table showing estimated revenue receipts and expenditure of the Nagaland for the current fiscal 2020-21 as provided by the State’s Finance Department on September 23. (Morung Graphic)

Morung Express News
Kohima | September 23

Given the trend of revenue receipts of the State this fiscal, the Nagaland government today informed that the current year (2020-21) is expected to close with a deficit of Rs 2358.81 crore as per budget estimates.

The Finance Department in a press release informed that it is a combination of decline on receipts from the centre, particularly in State’s share in the taxes and duties of the union government and falling internal revenue.

 The COVID-19 and the impact of lockdown imposed following the outbreak of the pandemic is cited as the primary reason behind the estimated surge in deficit.  

Giving a detailed break-up of the status of State’s economic health, the Finance Department informed that initially, the monthly receipts was as Share of Central Taxes and Duties was expected at Rs 320.96 crore per instalment.

However, actual receipts were only Rs 263.80 crore per instalment so far, resulting in a monthly deficit of Rs 57.16 crore, it said.

The receipt has again been reduced to Rs 240.47 crore since June 2020, due to which the State’s monthly deficit has risen to Rs 80.49 crore, it added. 

Consequently, the estimated total deficit during 2020-21 on account of shortfall in receipts of Share of Central Taxes and Duties alone comes to Rs 1080.13 crore, the department maintained.

Meanwhile, the negative impact of the lockdown has also led to a fall in the State’s revenue by about Rs 38 crore a month over the receipts of 2019 during the period April-August 2020, it highlighted. 

“Given the present trends, the revenue receipts of the State are likely to witness a decline of Rs 1650 crore during 2020-21 against what has been budgeted,” it informed.

As a result, the current year 2020-21 is expected to close with a “deficit of Rs. 2358.81 crores as per budget estimates and this includes an increase of Rs. 939 crore since 2014-15” the department said. 

Attributing the deficit to factors like implementation of the last Pay Revision for the State Government employees and payment of pending dues and liabilities to contractors, the government also stated that, in view of the unforeseen developments caused by the pandemic, the year is expected to close with a much higher deficit than estimated.

Meanwhile, the department informed that a total of Rs 115.80 crore has been spent on fight the pandemic from the State’s own resources. 

Nagaland also received only Rs 27.84 crore as fund specifically for COVID-19 while total COVID-19 cess collected from April to August 2020 was Rs 13.14 crore.     

No extra funds for COVID-19

It further clarified that releases of funds by the Ministry of Finance as Revenue Deficit Grant and State’s Share of Union Taxes are not specifically meant for fighting the COVID-19 pandemic and the contention that the State Government is “getting extra funds does not arise.”

“It is once again clarified that the releases made by the Finance Ministry are Revenue Deficit Grant and State’s Share of Central Taxes and Duties,” the department stated, adding: “These releases are receivable even in the absence of the pandemic.”

These are meant to meet various types of recurring expenditure such as salaries, pensions, debt servicing etc., and there is no mention in any of the sanction letters of the Central Government that they are meant to be spent on COVID-19, it elaborated.