Staring at debt trap

Nagaland’s financial health is in a precarious condition unless there is a political will to arrest the deepening crisis and rescue the state from an impending economic crisis, any talk or preparation of vision documents would mean nothing. Chief Minister Neiphiu Rio who also holds the crucial finance portfolio presented a Rs. 2212.74 crore budget deficit for the year 2023-24. The negative opening balance for 2021-22 accounted for Rs 2363.04 crore. According Rio, the closing accumulated deficit has been reduced substantially from the estimated closing amount of Rs 2,212.74 crore in budget estimates to Rs 1,334.17 crore in the revised estimates. What is more worrisome is the state’s Internal Debt data reported at 82,782.540 in 2023. This records a decrease from the previous number of Rs. 85,985.410 for 2022. Capital Receipts data was reported at Rs. 1,60,751.160 and revenue receipts at Rs 23,145.66. The huge mounting debt of the state is the sum total of fiscal indiscipline over the decades and also the fact that the state has no substantial revenue earnings to substantially reduce the figure. Internal debt of several north eastern states, excluding Assam, are also high but most have better revenue earning potential. For example, Manipur’s internal debt stands at Rs. 93,684.100 in 2023 but its capital receipts stands at Rs. 2,49,950.820 while its revenue receipts are estimated at Rs, 2,44,478.620. The current 2023-24 budget for Manipur stands at Rs 35,022 crore while its budget deficit is estimated at Rs 891 crore. Meghalaya’s internal Debt data was reported at Rs. 25,648.500 in 2023. This records an increase from the previous number of Rs. 21,800.000 for 2022. Meghalaya’s Capital receipts stands at Rs.244,478.620 and revenue receipts at Rs.160,353.530. The budget for 2023-24 for Meghalaya was estimated at Rs.46,600 crore and a deficit of Rs.1592 crore. Mizoram’s internal debt data stands at Rs. 24,290.000 in 2023 while its capital receipts stands at Rs. 2723.32 and revenue receipts at Rs. 11,486.63 crore. The budget for 2023-24 for Mizoram stands at Rs. 14,209.95 crore and deficit at Rs. 1,565.000. Arunachal Pradesh’s internal debt stands Rs. 1,700.000 for 2023 while its capital receipts stands at Rs. 2,441,163.810 and revenue receipts at Rs. 238,385.400. The budget for Arunachal Pradesh for 2023-24 was estimated at Rs 17,947 crore and a deficit of Rs 758.26 crore for 2023-24. From the above, it is seen that Nagaland’s debt is growing each year in tandem with annual budget deficit. The option to come out of the debt trap is to strictly curtail unnecessary expenditure and to allot funds for creation of revenue generating assets. The undue urgency given for construction projects has to be drastically cut down as they are a drain on the budget that rob the state of much needed funds as state’s share for central projects. There is need for more transparency and accountability in financial matters. The wants will perhaps never be fully met so therefore, it is important to identify the need-based areas that serve the overwhelming number of people both in the urban and rural areas. Budgets should not be a five-year ritual or at the most, a ten-year vision but a clear blueprint to set in place a sustainable economy.