Moa Jamir
Chümoukedima | August 24
Union Finance Minister Nirmala Sitharaman, on August 24, highlighted that central funds to Nagaland in terms of tax devolution and grants-in-aid have increased considerably in recent years, particularly after the National Democratic Alliance led by the Bharatiya Janata Party assumed office in 2015.
Without directly stating so, the Minister, in essence, disagreed with the oft-cited under-funding argument, while stressing on better resource allocation to the State than the previous United Progressive Alliance, during an interaction with media here at Rhododendron Hall, Central Police Officers Mess in Chümoukedima.
Nagaland certainly requires a lot of help in terms of resources, Sitharaman observed, while informing that on August 23, Nagaland Chief Minister Neiphiu Rio had invited her to meet his cabinet colleagues and gave her a detailed presentation “of what the situation is about the capital and the current account, balance and deficit.”
“All of that has been explained, but I just want to highlight some data through you for the people in Nagaland,” she stated, before presenting a comparative data five years before and after 2014.
Tax devolution to Nagaland has increased from just Rs 3844 crore from 2009-2014 to Rs 20,812 from 2014-19, indicating a percentage change of 258.53%, Sitharaman pointed out, on the last day of her 3-day visit to Nagaland.
However, she noted that while tax devolution is done as per formula given by the finance commission to each state from the total tax collected, the grant-in-aid from the centre has also gone up.
Citing the Comptroller and Auditor General of India Audit report, the Minister said that between 2014-19, the grant-in-aid from the Government of India has reached Rs 29, 483 crore, up by 41.66% from Rs 20, 812 granted between 2009-14.
Thereafter, tax devolution till 2022-23 is Rs 16, 188 crore while grants-in-aid till 2022-23 is estimated at Rs 30,202 crore.
Under tax devolution, so far in this financial year up to June 26, a sum of Rs 812 crore has been transferred to the State out of Rs 4647 crore estimated for 2022-23, she said.
The grant-in-aid for FY 2022-23 is also estimated at Rs 9720.
The Finance Commission Grant from the Centre to Nagaland are budgeted to be Rs 4773 crore in 2022-23, a significant increase over Rs 1283 crore that was released in 2009-10, she stated.
In addition, a total of Rs 455 crore and Rs 1600 crore has been allotted to Nagaland under Special Assistance to States for capital expenditure, the FM highlighted.
While the former is under the Special Assistance to States for capital investment 2022-23, in the latter, Nagaland may submit capital expenditure projects in any sector up to amount of Rs 1600 crore subject to reform criteria under the Part IV to VI of the scheme.
Sitharaman, however, explained that about 20% of the component will be tied to some reforms while 80% of the amount can be untied.
“You can take it as it is,” she said, adding that 20% is tied only because the Centre wants to ensure that with these kind of monies, reforms that are considered ‘difficult’ are implemented.
“So one of two steps have been given which I'm sure the state government will consider in the interest of better governance and take it up from there,” Sitharaman added.
On infrastructure challenge
Continuing her argument, the Minister noted that there has always been a ‘question about infrastructure particularly when it comes to Nagaland,’ but said that other than the usual infrastructure funds, special assistance were provided during the COVID-19 years
“We had extended a special assistance for States for building their infrastructure that is - scheme of special assistance to States for capital expenditure. It was given to all states particularly for Northeast...That's a very important aspect,” she maintained.
It helped States during the COVID-19 years of 2020-2021.And it was extended for 2022 too, she said.
Sitharaman also highlighted on the Prime Minister’s Development Initiative for North-East (PM-DevINE) announced in the Union Budget 2022-23 for infrastructure development of the region.
She said an initial allocation of Rs 1,500 crore was made for the North-East and states can submit proposals under the scheme.
Among others, she also highlighted on how the GoI has released total of Rs 245 crores for Kohima Smart City Mission, and out of which Rs 195.99 crore have been utilised as of July 8, 2022.
A total of 17 out of over the 35 projects under Kohima have been completed, she said.
In the mostly one-sided interaction, she also dodged questions on whether the State was ‘underfunded or mismanaged’ and said that her call to the banks and State government machinery to undertake outreach missions in a time-bound manner was not sign that works were not happening, but rather to complete those which are incomplete; “and they shall complete it by September 30.”
