Budget delay due to Centre uncertainty; CM Rio flags revenue stress, fiscal gap

Nagaland chief minister Dr. Neiphiu Rio on Thursday said the delay in presenting the State Budget 2026–27 was due to uncertainty over the 16th Finance Commission recommendations, particularly the reduction in the State’s share of central taxes and discontinuation of key grants.
Addressing a post-budget press conference at the Assembly Secretariat, Rio said the budget presentation was deferred by over three weeks—from March 2 to March 26—while the State awaited clarity and assurances from the Centre on financial support.
He disclosed that Nagaland stood to lose an estimated Rs.7,552 crore during 2026–2031 due to the reduced share in central taxes. The State had projected a requirement of Rs.8,113.70 crore before the Commission but did not receive the expected allocation.
Rio said he met Union finance minister Nirmala Sitharaman on February 4 and also wrote two letters to the Centre, seeking a minimum of Rs.4,500 crore for the current financial year to meet essential expenditures such as salaries, pensions and debt servicing. He said the budget was ultimately presented based on assurances of a positive response, though funds were yet to be received.
Highlighting the State’s fiscal position, Rio said Nagaland’s own revenue stood at 10.52%, amounting to Rs.197.75 crore, while non-tax revenue was projected to grow by 7.5%. He said the total budget outlay had been increased to Rs.1,350 crore, marking a rise of 12.5%.
He informed that 17 new initiatives worth Rs.62 crore had been incorporated in the budget.
On fiscal management, the chief minister said the State had improved its deficit position, achieving an improvement of Rs.111.81 crore over earlier estimates. He said the deficit for 2026–27 was projected at Rs.337.07 crore.
Responding to queries on the Naga political issue, Rio said a senior retired Intelligence Bureau official, Ajit Lal, had been identified as interlocutor. He added that a Union minister of state from the Ministry of Home Affairs was also expected to be appointed as chairman, though no formal announcement had been made.
Meanwhile, finance commissioner Kesonyü Yhome said the decline in the State’s budget was largely due to the reduced share in central taxes under the 16th Finance Commission award, affecting 14 states including Nagaland.
He also pointed to a slowdown in GST collections following rate rationalisation in September, which impacted revenue inflows. Yhome further said exclusion of Ways and Means Advances from the Budget Estimates, with such advances from the Reserve Bank of India to be reflected in Revised Accounts, had also contributed to the apparent decline in the budget size compared to the previous year.