Wednesday, May 31, 2023

Rio presents tax free Rs.1374.17 cr deficit budget


Nagaland chief minister Neiphiu Rio, who also holds the finance portfolio, presented a tax-free deficit budget of Rs. 1374.17 crore for the financial year 2023-2024 at the ongoing first session of the 14th NLA Monday, while stressing on the need to mobilize more resources to meet the increasing developmental needs. Rio put forth the budget proposals estimating the gross receipts at Rs.23,145.66 crore rupees and gross expenditure at Rs. 23,085.66 crore rupees.
He informed the house that increased receipts in Share of Central Taxes and Duties and as well as from state’s own revenues has helped the state discharge a substantial amount of liabilities in the form of CSS backlog as well as civil deposits. As a result, the closing accumulated deficit was reduced substantially from the estimated closing amount of Rs.2,212.74 crore in budget estimates to Rs. 1334.17 in the revised estimates.
However, Rio said the current’s year transactions were estimated to result in a negative balance of Rs. 40 crore, while the year 2023-2024 is estimated to close with an accumulated deficit of Rs. 1374.17 crore. Also due to the forced release of CSS backlog of Rs. 728 crore, the closing deficit for the year 2022-23 has been reduced by Rs. 878 crore from Rs. 2212.74 crore to Rs. 1334.17 crore, he said.
Naga issue top priority: Rio’s 14-paged budget speech also mentioned that Naga political issue would continue to be at the top of government’s agenda with the government playing the role as active facilitators and to make every possible effort to contribute in taking the political dialogue in the desired direction.
Rio welcomed the positive initiatives and achievements that have been made in the recent past by the negotiating parties and the various Naga groups who are making genuine efforts towards unity and understanding and also welcomed the joint statement made on October 18, 2022 at Kolkata, and the signing of the ‘Nagas are moving ahead’ at the Meeting at Chümoukedima on January 14, 2023.
ENPO demand: Rio said the State Government has already recommended the formation of an autonomous region for eastern Nagas and reiterated that the state government will render all possible support in making this a reality. He added that the state government has collectively urged upon the Centre to extend a special economic package to the eastern region and exuded confidence that this will be realised and implemented in the coming months.
Rio, however, noted that Nagaland was a small state and any division was painful and will further weaken the Nagas. Rather he said Nagas are for greater unity and desire the integration of the contiguous Naga-inhabited areas to live under one administrative umbrella.
“We will always stand for unity of the Naga people at all costs” Rio said and appealed to strengthen the bonds of oneness and work as one united force so that the Eastern region will emerge as a shining star of Nagaland and together make greater contribution in nation building and provide opportunities to the youth to be part of India’s rise and growth.
He also informed that Union Home Minister Amit Shah, has on more than one occasion, given assurance that the Central government will work out an arrangement in consultation with the ENPO and the State Government to address their aspirations for a degree of autonomy and speedier economic development.

Socio-economic sector: In the socio economic sector, Rio made brief references to some key initiatives that were launched in 2022. These included CMHIS, CM’s Micro-finance Scheme, Nagaland Staff Selection Board (NSSB), hosting of three-day Corporate Social Responsibility Conclave from August 22 to 24, 2022 during which an opportunity was seized to showcase the potential for investment absorption in human resources, tourism and hospitality, forest and environment, agro-based industries and organic produce.
He claimed that these areas would benefit both the investors and people and disclosed that funds actually received, formally committed and value of goods stood at about Rs 82 crore to date.

Financial issues: Rio said reforms were undertaken in Central sponsored schemes (CSS) by their integration with Public Finance Management System (PFMS) portal. He said all CSS implementing departments were required to manage receipts and expenditure as well as submission of utilisation certificates through the PFMS portal.
Under this new system, he mentioned that both the State and Central governments had the facility of viewing all transactions undertaken from the single nodal account linked to PFMS and now most of the CSS had gone into Direct Benefit Transfer mode.
Along with rest of the country, he said Nagaland also migrated to this system that would bring in transparency and efficiency.
He stressed on releasing the Central and State shares within 30 days from the date of receipt of funds from the Central government, failing which the State would have to pay a penalty of 7% per annum on the amount received. This required all CSS implementing departments to ensure timely movement of files, he added.
Rio maintained that the implementation of CSS was of critical importance since these could substantially impact the State socially and economically. He said it was necessary for the implementing departments to ensure that they maximised the impact of the activities undertaken.
He also noted that there was a growing trend of departments neglecting their core activities over the years, which affected delivery of government services for public benefit in various sectors.
Barring some major CSS, he said most departments were paying less attention to their core activities and focusing more on construction of offices and residential buildings. He called for correcting this trend and take up activities that positively impacted people’s lives.
He disclosed that some of the points in the election manifestos would be incorporated in government plans and schemes like scholarship for sponsoring doctors for further specialised education, exposure trips and study tour for progressive farmers, capacity building to promote indigenous products and entrepreneurs, scholarships and awards in sports and games, capacity building, chief minister’s scholarship on music, arts and performing arts, capacity building and training for meat and dairy production, training centres and coaching institutes for students aspiring for civil services and common entrance exams, sponsoring courses in institutions within and outside the State for specialised studies and introduction of CM’s Journalism and Media Fellowship and study tour-cum-seminars for press and media fraternity.
He said the government’s aim now was to take Nagaland towards “A State of Excellence” and work out policies, programmes and development strategies that would enable the citizens, especially the youth, to attain excellence in all sectors, and succeed at national and international levels. He appealed to the citizens to strive to excel in their chosen fields and, while doing so, push “brand Nagaland” and popularise “Naga soft power”.

Increase in revenue: Rio also stated that there was a gradual increase in revenues in areas like State GST, which had increased from Rs 788.37 crore in 2019-20 to Rs 1,092.21 crore in 2021- 22.
He revealed that revenue from coal sector too increased from Rs 53 lakh in 2019-20 to Rs 2.03 crore in 2021-22, while it had already touched Rs 5 crore in the current financial year, as per the latest details furnished by the department, and was expected to cross Rs 8 crore by the end of the current fiscal.
He mentioned that forest sector too witnessed a jump in revenue collection from Rs 13.72 crore in 2019-20 to Rs 19.06 crore in 2021-22.
However, the chief minister revealed that despite encouraging trends, the State’s own revenue collection still accounted for only 12.36% of total revenue receipts and this was barely sufficient to meet the salary expenditure for two-and-a-half months, mainly because the State had a small tax base.
He cautioned that the State would be adversely impacted by the yearly reduction in Revenue Deficit Grant as recommended by the 15th Finance Commission.
Over the five-year period of the award from 2020-21 to 2025-26, he said the Revenue Deficit Grant would reduce by Rs 910 crore, adding that it appeared that the Commission had taken this stand to pressurise the State to cut down its revenue expenditure, especially on salaries.
He said the unusually huge amount of resources the State spent on payment of salaries had been viewed critically by almost all the finance commissions.
Given these circumstances, Rio said it had become incumbent upon the State to look into all potential areas for revenue generation, streamline collection systems and plug all areas of leakage. He mentioned that this would require the government employees to remain motivated and driven by a determination to contribute positively.
He said that some measures had already taken and were in place like PIMS, while e-PayBill had already put a huge check on ghost employees and illegal appointments that were rampant in the past, thereby putting an end to misuse of salary provision in the budget by departments.
Rio pointed out that unless an appointment went through the proper process, no salary would be provided, claiming that this would help the Finance Department to be more accurate in providing salary provision to each department.
Another important initiative in the pipeline was the integration of Grade-IV GPF with e-PayBill, which was nearing completion, he added.
He stated that keeping of GPF accounts of Grade IV employees till now was the complete discretion of drawing and disbursal officers (DDOs), which the State government was unable to ascertain how much had been deposited, how much was withdrawn and what was the balance. He hoped that this uncertainty would be completely removed once this was linked with PIMS and e-PayBill.
The chief minister said the State was moving towards computerising the pension, taking advantage of the registrations being made for Chief Minister’s Health Insurance Scheme (CMHIS). He pointed out that this would help remove bogus and doubtful pension payments, adding that this was urgently required considering the fact that the total pension expenditure in 2021-22 stood at Rs 2,158.67 crore, which was a heavy burden on the State exchequer.
He also called for reducing losses in the power sector. The Power Department had collected Rs 260.64 crore up to February 2023 this year, out of which Rs 68.58 crore was from power trading, and the amount spent on power purchase up to January this year was Rs 448.12 crore.
By the end of the current financial year, he said the amount spent on power purchase was estimated to reach Rs 580.89 crore, while revenues might barely touch Rs 280 crore.
The last four years had witnessed a loss of Rs 1079.74 crore in the power sector, which was unsustainable, and required urgent corrective measures, he stressed.
Rio pointed out that NST department was another loss-making entity, pointing out that as against Rs 12.64 crore spent on fuel alone, the department was able to collect only Rs 6.50 crore in revenue. He noted that although the government provided bus services to interior areas for the benefit of people, such levels of losses could not be sustained over a prolonged period.
Admitting that there were areas where the State could reduce losses and improve efficiency, he stressed on the government bringing down unnecessary expenditure and practising austerity in the functioning of all departments.
He appealed to the departments involved in collecting taxes, cess, royalties and fees to offer the facility of online payment to their customers, especially in places where there was good mobile connectivity, stating that this would increase transparency, reduce delays and prevent misappropriation.


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