Clubbing heterogeneous funding streams into a single aggregate and using it to claim equitable treatment between the valley and the hill areas is fundamentally flawed.
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The article “Manipur's Hill Districts Received over INR 17,259 Crore in Development Funds in Last 10 Years” by Naorem Mohan dated 31st December 2025, posted in India Today NE, is misleading, as it indiscriminately aggregates fundamentally different streams of funding. This amounts to comparing apples and oranges—an exercise that is neither analytically sound nor fair. The data is incomplete as a comparative analysis between the valley and hill areas is not made. This is a critique of the methodology.
The reality will become clear only when government funding is disaggregated according to its source, purpose, and the degree of control exercised by the state government. Broadly, public funding in Manipur flows through several distinct channels, each governed by different norms and objectives.
First, there are the State’s own resources (including loans) and Finance Commission transfers (tax devolution and grants) released through the State Finance Department. These are largely untied funds and remain the only funding stream over which the State government has substantial discretion. In Manipur, budgetary trends show that a very large portion of resources from this source, often around half, is absorbed by salaries and establishment costs, while a significant share, in the range of one-fourth to one-third, goes towards debt servicing. The State government has increasingly relied on borrowings, leading to a heavy debt burden. As a result, debt servicing now consumes a substantial share of the State’s available fiscal resources, further shrinking the space for developmental expenditure. What remains for development is limited. This residual amount is frequently insufficient even to meet the State’s mandatory matching share for all Centrally Sponsored Schemes (CSS). The funding from these sources (known earlier as Five Year Plan and Annual Plan consisting of State’s own resources and Finance Commission transfers) are to be shown separately for the Hill Areas and the rest of the State and placed before the Hill Areas Committee (HAC) and the views of the Committee taken into account before the Plans are finalised as provided by Article 371-C and the Presidential Order dated 20th June 1972. This source of funds being fundamental in determining equitable distribution of State’s resources between valley and Hill Areas is evident from the Constitutional provision and the Presidential Order. Other sources of funding are incidental.
Second, there are Centrally Sponsored Schemes, where funding is shared between the Centre and the State, commonly in a 90:10 ratio for Special Category States like Manipur (though ratios vary by scheme). Allocation, design, and expenditure norms under CSS are centrally determined, and implementation depends on the State’s capacity to provide its share and meet procedural conditions.
Third, substantial investments flow directly from central ministries and their agencies—such as NEC, NHAI, NHIDCL, CPWD, BRO, and defence-related agencies—for highways, border infrastructure, airports, and other strategic projects. These expenditures are executed by central agencies and are not distributed by the state government between the valley and hill areas.
Fourth, there are Central Sector Schemes, fully funded by the Government of India, which are implemented either through central agencies or, in some cases, through state departments or designated organisations. Many of these focus on social sectors and special interventions, and their geographical spread is determined by scheme guidelines rather than state policy choices.
Fifth, Externally Aided Projects (EAPs) are tied to specific objectives, locations, and conditions agreed upon with external funding agencies. These projects are area-specific and cannot be reallocated at the discretion of the State government.
Sixth, there are National Projects, such as the railway line to Manipur, which are of strategic and national importance. Their funding and execution lie almost entirely outside the State’s control.
Given this reality, clubbing all these heterogeneous funding streams into a single aggregate and using it to claim equitable treatment between the valley and the hill areas is fundamentally flawed. Such aggregation obscures the crucial fact that only state-controlled budgetary resources can meaningfully reflect the state government’s intent and priorities.
For any honest assessment of equity, the most relevant data is the year-wise distribution of State budgetary resources (Finance Commission transfers and State funds) between the valley and the hill areas—because this allocation lies squarely within the State government’s authority. Other funding streams, such as CSS and Central Sector Schemes, are governed by external norms, eligibility criteria, and conditionalities, and therefore cannot be cited as evidence of State-level fairness.
In the interest of transparency, justice, and fairness, it is therefore urged that funding be disclosed category-wise and year-wise, clearly showing allocations to the valley and the hill areas separately. This is especially important in respect of State budgetary resources (Finance Commission transfers and State own funds), which is the true test of equitable distribution of resources between the valley and the hill areas and is constitutionally mandated.
If the State government genuinely seeks to uphold constitutional justice, it must place separate and explicit budget statements for the Hill Areas alongside those of the valley before the Hill Areas Committee (HAC) before the passage of each budget bill, as mandated under Article 371-C of the Constitution and the Presidential Order dated 20 June 1972. A public and unequivocal assurance to fully implement these constitutional provisions in both letter and spirit would be the true test of sincerity.
Ngaranmi Shimray
New Delhi