Nagaland’s Finances Under Scrutiny: CAG Report Reveals Sharp Rise in Fiscal Deficit and Debt
A recent report by the Comptroller and Auditor General (CAG) of India has shed light on Nagaland’s financial health, revealing a concerning trend of rising fiscal deficit and debt. The report, tabled in the Nagaland Legislative Assembly, highlights a mixed picture of the state’s economic performance. While the state’s Gross State Domestic Product (GSDP) has seen a significant growth of 12.60% in 2022-23, the increasing fiscal deficit, declining grants from the central government, and rising public debt pose significant challenges for long-term sustainability.
The report suggests that the state’s reliance on revenue expenditure has resulted in a sharp increase in fiscal deficit, which ballooned to 1,562.63 crore in 2022-23, a whopping 499.81% rise from the previous year's deficit of260.52 crore. Moreover, the report flags concerns over financial mismanagement, with a substantial portion of funds remaining unutilized and potential misappropriation of grants.
The state’s revenue receipts have seen a rise of 4.82%, driven by higher tax collections and central devolution of funds. However, grants-in-aid from the central government have declined by `212.43 crore (3.05%). The report notes that the share of grants in revenue receipts has dropped from 57.21% in 2018-19 to 47.94% in 2022-23, indicating a growing reliance on tax revenue and devolution rather than discretionary grants.
The report also highlights the state’s high committed expenditure, which includes salaries, pensions, and interest payments, accounting for 83.22% of total spending and 37.32% of GSDP. The state’s capital expenditure, which includes spending on infrastructure and development, has increased by 42.79% to `2,704.22 crore in 2022-23, but remains only 16.78% of total expenditure.
The report also flags the state’s increasing public debt, which has risen from 8,115.52 crore in 2018-19 to13,241.81 crore in 2022-23, with a compound annual growth rate (CAGR) of 13.02%. The debt-to-GSDP ratio has also increased from 39.75% to 43.38% during this period.
The report concludes that the state’s financial management is plagued by inefficiencies, with instances of financial mismanagement, delayed fund utilization, and potential fund diversion. The state’s seven state-owned public sector enterprises (SPSEs) are also struggling, with three of them incurring losses and only one reporting a profit.
The CAG report serves as a wake-up call for the state government to address its financial woes and adopt more sustainable strategies for managing its finances. As the state navigates these challenges, it is clear that fiscal discipline, efficient financial management, and long-term planning will be crucial for ensuring the state’s economic stability and growth.
Original Source: https://www.morungexpress.com/nagaland-deficit-surge-declining-grants-rising-debt
Category : Nagaland
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Publish Date: 2025-03-20 22:23:00
