Budget ladder

Unlike in other states where economists or freelance budget specialists appraise a particular budget and point out the good and bad of it, apparently, the budget presented to the Nagaland Legislative Assembly on March 22 and which was later passed smoothly on March 24 went largely un-scanned as crucial misses were not pointed out. State chief minister Neiphiu Rio who also holds the crucial finance portfolio, presented his Rs.24,239.96 crore budget for 2022-23 which projected a positive balance of Rs.150.30 crore. The term “positive balance” was last heard sometime in 2003 and it sounded great. However, the fleeting moment of elation was brought to rude reality when the accumulated deficit of Rs.2,363.04 was to prevail upon the budget which would close with a negative balance of Rs.2,212.74 crore. This time, as with 2016 till 2018, the assembly was without any opposition and so the budget escaped the customary demand of the opposition for a cut-motion. Platitudes flowed through the aisle of the house as the tongues of members spoke with the same tenor. The budget is effusive and full of fresh ideas and initiatives, but these increasingly look like post-dated cheques. It falls far short of addressing crucial issues such as corruption, economy, employment among others. What is a worry about the budget, not only this time but also since the past many decades, is the spectre of widening deficit. It does not mean that deficits are necessarily bad since budgets can be negative on account of investments to earn revenue. The problem with unmanageable budget deficits is that they tend to eat away the succeeding budget unless the figure is reduced to manageable limit. Budgetary figures are mostly continuation of the previous budget with some changes. Like most budgets, it is long on intent and short on content. This may be seen in how deficit continues to soar. According to the budget figures, out of the total expenditure estimated at Rs.24,239.50 crore, a huge amount of Rs.8014.18 crore comes from servicing of debt (including ways and means advance). This amount alone makes up a hefty 42 per cent of the entire expenditure. It may also be reminded that the runaway deficit in almost all budgets also deprive the state of means to fund projects as state share. This only leads to the obvious that expenditure should not exceed the income beyond a certain manageable limit. However, there is no political will at enforcing fiscal discipline and so even the fiscal responsibility act remains only on paper. The political will needed to effect meaningful austerity was also buried when, despite mounting financial crisis, successive governments continued to focus on spending with an overdrive on construction projects. It may be recalled that then opposition leader T.R.Zeliang described the 2021-22 budget as “contract-oriented” as a substantial portion included allocations for construction of office buildings and other infrastructural projects. Huge funds have been allocated or borrowed to construct palatial office buildings for creating “an ambient environment” so that the government servants can work more efficiently. However, the budgeted amount for projects invariably shoot up even up to over 100% the original estimates. There are no avenues for raising taxes especially when the entire nation is grappling with rising fuel prices, dwindling internal revenue collection, unemployment and inflation etc. Budgetary visions without addressing the core issues, have not contributed anything much or justified the huge expenditures incurred, if the past serve as indications.