Kohima: Ahead of the Nagaland budget session for 2022-23, financial experts from the state have urged the need to reduce non-development expenditure from the state budget.
Interacting with journalists during a one day workshop on “Budget simplified” organised by the Kohima Press Club (KPC) in Kohima on Saturday, Ketoulhou Metha, Senior Research Officer (Budget) from the Department of Finance said non-development expenditure accounts for a huge chunk of the state budget leaving little to no room for investments.
Of the total of Rs 9,111.60 crore estimated for non-development revenue expenditure for 2021-22, Rs 5,303.20 crore was allotted for salaries, Rs 1,752.48 crore for pensions, Rs 856.77 crore for payment of interests, and Rs 1,199.15 crore for other revenue expenditures which includes the purchase of power.
Kikheto Sema, Agriculture Production Commissioner (APC) and former secretary of Finance also shared similar concerns. As per data shared by the officer, Nagaland crossed the 1 lakh government employee mark in 2004.
Sema informed that as of March 31 this year, Nagaland has a total of 1,40,765 employees—1,00,001 regular employees, 24,854 fixed employees, and 14,744 work-charged employees, excluding employees under Public Sector Undertaking (PSU).
In this regard, he said that the ratio of government employees to the state population (as per the 2011 census) is 1:16. He also informed that Nagaland holds the record for the highest number of governmental departments and establishments in the North East region with a total of 74.
The other expenditures include grants to PSUs with no returns (0.94% as per BE 2021-22), administrative and establishment charges, asset maintenance (1.47%), power purchase (2.96%), centrally sponsored schemes, Externally Aided Projects (EAPs), State development (earlier State Plan) through state programmes and state share for CSS.
Sema highlighted that some issues which the state faces include the huge dependence on other States for all essential commodities, particularly meat and meat products, and fruits and vegetables that accounts for Rs 1,500 crore annually. He also mentioned the indirect burden on the state expenditure by NGOs and Organizations. The huge expenditure on elections and poor work culture and dependence on others are some other issues according to the officer.
As for the source of funds, Nagaland generates its revenue largely through a share of central taxes; and other sources like revenue deficit grant; state tax; non-tax revenue, including lotteries where it generates around 11-15 crore, power, state transport, water supply, forest royalty and so on; CSRs; EAPs; Security-related expenditure reimbursements; other Finance Commission awards; and borrowings.
So, what can be done?
Metha suggested that one way of reducing revenue expenditure is by way of rationalising government employment. He also urged the need to create a congenial environment for economic growth and facilitate the growth of the private sector, particularly tourism in the local context.
He also urged the need to Increase Capital Investment, encourage prepaid and smart meter payments for power consumption, and EAP funding for Capital Projects.
As for Sema, he recommended for a merger of departments and district offices/establishments to cut overhead expenditure wherever possible and that inefficient and non-productive employees be weeded out, even by offering the Voluntary Retirement Scheme (VRS).
While he expressed hope that an early solution to the ongoing Naga political issue could pave a way for development, he also recommended investment in quality educational institutions in the state; reforms of the election process and clean elections; and more investment in infrastructure.
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