Nagaland: Need to resolve issues confronting public through political will

As the Nagaland Legislative Assembly (NLA) gears up for its budget session from March 2, all eyes are on the state’s economic trajectory. The latest available economic data, drawn from Nagaland’s on-going fiscal assessments and national surveys incorporating state-level data, paints a picture of modest growth amid persistent hurdles.
Inflation in Nagaland has eased to 2.79% during April–December 2025–26, a sharp decline from previous years, signalling some stability in consumer prices.
Nagaland’s economy, mostly dominated by agriculture, services, and emerging sectors, faces structural issues such as labour shortages, infrastructure gaps, and external pressures. However, over and above economy, there are various issues that continue to attract concern among public such as:
ILP: The Inner Line Permit (ILP) system, long regarded as a constitutional safeguard for indigenous people and enacted under Bengal Eastern Frontier Regulation (BEFR) 1873, is under scrutiny for interpretations that have caused confusion for its implementation. Introduced to regulate non-local entry, the ILP has however led to acute labour shortages, particularly in construction and manual sectors. One contentious issue is the provision that allows one local guarantor to stand surety for up to ten non-locals.
Many argue that such flexibility weakens the very purpose of ILP if it is meant to regulate and monitor inflow effectively, whilst others counter that without such relaxations, on-going construction, small industries and even daily market operations, would grind to a halt. A local contractor engaged in infrastructure works in Dimapur described the current labour climate as “unsustainable”.
While appreciating the intention behind ILP, he expressed frustration that Nagaland is suffering from a severe shortage of labour due to apprehension.
He cited instances where local labourers, less skilled, charge double that of a non-local labourer, who is skilled and capable of doing more works. He noted that labour shortage has caused sharp rise in amount of daily wage thus, increasing the cost of construction and services.
Taxation, extortion: Market surveys in Dimapur indicate that prices of basic commodities have steadily increased over the past years, with traders justifying them to not only due to transportation charges but rampant and multiple extortion under the guise of taxation.
On the issue of gate collections, the state government has, after a long pause, reiterated ban on check gate collections and the effect will only be felt through a consistent enforcement.
However, extortion by nearly 30 political groups across various trade and commercial activities has strangulated the economy.
To add further to the woes of business, forcible collection by various unions and association especially in Dimapur, under the guise of fees or fines, has triggered exodus of trade. Under such a condition several business firms from Dimapur have relocated either to Lahorijan or Khatkhati or Diphu and operating shell firms in Dimapur. This has led to huge loss of GST revenue incurred by the state.
The other issue is the inability of the state government to act more decisively in resolving the land encroachment at Dimapur railway station which is causing hurdles against redevelopment of the station. Prolonged delay is likely to compel the Northeast Frontier Railways (NFR) to relocate the project to nearby Assam and Dimapur will be reduced to a feeder station.
Power deficit: Nagaland’s power sector continues to remains a long-standing issue, especially for entrepreneurs running small business establishments.
According to Annual Administrative Report 2024-25 of the Power Department tabled in the 6th session of the 14th Nagaland Legislative Assembly, Nagaland is an extremely power deficit state.
It stated that of the state’s 193MW peak demand, it relies 95% of its requirement on import during lean season and 90% during monsoon.
Another survey by ADB.ORG reported that state’s peak power requirement is estimated to be around 180–200 MW, while its own generation capacity is significantly lower, making it heavily dependent on central allocations and external procurement.
Speaking with a local entrepreneur who runs a retail shop in Dimapur, she stated that frequent outages affect small businesses, citing that even basic retail operations cannot be undertaken.
Many argue that while Nagaland has unique cultural and ecological assets, yet its inconsistent power supply, limited air and rail connectivity and ILP discourage large-scale tourism investments.
Tourism: Acknowledging investment policies of the state government on the Hornbill festival, a tour guide from Khonoma argued that state government should widen its scope beyond the ten-day festival. Another entrepreneur suggested that making Agri-Expo an all-year round tourist cultural spot would give a huge boost for tourism trade, while leaving Kisama for World War 2 events, horticulture, floriculture, literature, music, pageants and official programmes.