Mizoram’s massive economic crisis could continue until end of year

Aizawl: The Mizoram government is hopeful of improving and stabilising the state’s financial condition over the next three to four months, an official statement said on Thursday.

The northeastern state has been reeling under a stiff financial crunch due to several reasons, including COVID-19 pandemic, with the state’s treasuries on the verge of closure.  

“The bulk of the financial constraints are expected to be resolved after three or four months. Next installments of state’s shares of taxes are also expected to be released soon by the Centre following the release of all funds under the Centrally Sponsored Scheme (CSS) from the state’s account to implementing departments,” the statement issued by the state finance department said. 

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Clarifying the current financial constraints, the statement said that the effects of the pandemic and non-release of state’s share of taxes and grants amounting to over Rs. 2,630 crore during the later part of the fiscal 2019-2020 to 2020-2021 was strongly felt upon the state’s fiscal management. Though the Centre provided nearly Rs. 100 crore COVID-19 assistance, it was not adequate to meet the state’s financial requirement to tackle the pandemic, it said. 

It said that the Centre’s new procedure on the release of funds under the CSS has also impacted not only Mizoram, but also other northeastern states.

Under the new rule called Public Finance Management System (PFMS), the CSS funds are released to the Single Nodal Account (SNA) of the implementing agency. 

The Centre can monitor the usage of funds through the new rule introduced last year. Mizoram implemented the rule in September last year.

However, the CSS funds were sometimes not instantly released to the SNA when there were shortages, the statement said.

The Centre had in July directed all states to release all CSS funds, which were released before March 31, 2022, to disburse them to the single nodal agencies’ accounts on or before July 20.

“During the past two weeks, the Mizoram finance department has released CSS funds amounting to Rs. 610.69 crore to implementing agencies by availing overdraft besides ways and means advance and special drawing facilities,” the official statement said. 

Citing that state treasuries have not been closed, the state finance department’s statement said that payments have been rather significantly reduced owing to the prevailing financial constraints.

However, utmost necessary payments are being made and Rs.17.84 crore was released from the state treasuries between July 25 to July 28, it said.
It said that the government is planning to release salaries to regular employees and pensions by August 10, while muster roll and work charged employees would be paid by August 5.

The statement further said that the state government is making massive efforts to stabilise the financial condition and all revenue earning departments have been instructed to release revenues to the state’s account at the earliest. 

Earlier on Wednesday, main opposition Zoram People’s Movement (ZPM) had asked for a special session to review and ascertain the state’s financial status. Congress had also last week asked Chief Minister Zoramthanga, who also holds the finance portfolio, to release a white paper on the state’s fiscal condition. 

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