Rio presents deficit budget; new tax on heavy machinery

Our Correspondent
Kohima, Feb. 13 (EMN): Chief Minister Neiphiu Rio on Thursday presented a revenue deficit budget of INR 2358.81 crore for 2020-21, surpassing last year’s negative balance of INR 1,611.98 crore.

The closing deficit increased due to reduction in the state’s share of central taxes, Rio said while addressing a press conference right after presenting the budget at the ongoing 13th Nagaland Legislative Assembly. The intention was to save and bring down the deficit, but instead, it increased due to shortfall in collection of taxes by the central government, which reduced the amount distributed to all states and union territories including Nagaland, he added.

Initially, in the budget estimates of the union government, the share of taxes for Nagaland was projected at INR 4,206 crore. However, in the revised estimates of the union budget, it was reduced to INR 3,267 crore, a reduction of INR 939 crore. “This shortfall in tax collections of the Centre has affected all states,” Rio maintained.

The chief minister has estimated a gross expenditure of INR 21,049.87 crore against gross receipts of INR 21,049.87 crore.

15th Finance Commission

The chief minister in his speech said that the coming financial year is important for the state because it marks the commencement of the Fifteenth Finance Commission award period. Since the 15th Finance Commission has been extended up to October 2020, the submission of the final report of the commission was delayed. However, the commission has submitted its report for the year 2020-21, Rio said. The commission will be submitting a separate report for five years for the period of 2021-22 to 2025-26 by October 2020, he added.

The state government has requested the commission to recommend state-specific grants for infrastructure projects, for which the commission has permitted submission of an additional memorandum in case we desire. The required details are being prepared for submission, he added. 

Meanwhile, during the visit by members of the 15th Finance Commission to Nagaland in January, various issues faced by the state were highlighted to them, according to Rio. It included the need for support in completing the Trans Nagaland Highway (Foothill road) and for Chiethu airport, need for funds to maintain capital assets and problems faced by state due to discontinuation of SPA funding, which has left the state with a financial liability of INR 529 crore.

It also highlighted the problems faced while implementing central schemes due to the poor communication network and limited banking facilities, non-release of grants to Urban Local Bodies due to inability to hold municipal elections, and historical reasons for the high number of government employees resulting in high salary expenditure. “In fact, the ratio of government employees to the population is among the highest in North East,” he added.

Indo-Naga political issue

Rio appealed to the negotiating parties to “listen to every cry of the people and sincerely work towards the achievement of lasting peace”. While appreciating government of India for their sincerity, Rio urged the Centre to make “extra effort to usher in an early political settlement that is honourable, one that upholds the democratic political rights of the Nagas”. Further, he appealed to the Nagas to make efforts towards unity, oneness, and reconciliation.

“We cannot delay peace any longer. We owe it to the present and future generations to usher in peace and pave the way for them to strive towards their aspirations of achieving success and excellence,” Rio said. “The time is now more than ripe for us to walk the extra mile to achieve genuine peace,” he added. ‘All leaders across the spectrum must be prepared to face the realities and hard truths and we must be prepared to address the core issues without any hesitation. It is time to do away with rhetoric and be practical in our approach. We cannot allow the issue to drag on any further’, he echoed.

The chief minister went on to add that an honourable solution that is acceptable would not only pave the way for progress and development but also would surely strengthen the foundations of democracy within the country and elevate its standing amongst the international comity of nations. 

INR 11.25 crore for sports development

As part of the government’s initiative to improve sports infrastructure, it has earmarked INR 10 crore for installation of astroturf football grounds at Chümoukedima Police Complex and at Loyem Memorial Ground in Tuensang.

Under the initiative of Youth Resources and Sports Department, a programme called “Career Guidance and Employability Skills Development Programme” seeks to create career awareness among students and help them to make informed decisions about their future. It will help them to make career choices in line with their interests, abilities and strengths. This programme will impact 37 Higher Secondary Schools across 11 districts in the state. It has a targeted job placement of over 70% for the job seekers. The state government has earmarked INR 1.25 crore for this initiative during 2020-21, Rio informed.

The Nagaland Olympic Association is formulating a game plan to promote sports and games as gainful professional careers, and the state is looking forward to hosting more national and international events in the coming years. “Nagaland must emerge as a state with vibrant sports culture,” he said.

Scholarships for TaFMA projects

Rio also mentioned the upcoming projects under Task Force for Music and Arts (TaFMA), some of which included residencies, scholarships, exchange programmes with knowledge partners and collaborations with art institutions.

INR 2 crore for rubber plantation

In order to promote the growth of rubber plantation in the state, an amount of INR 2 crore has been set aside for the purchase of rubber rollers that will cover 10% of the mature rapping plants, Rio said.

Rubber cultivation has now expanded coverage of 19,077 hectares, out of which 2,571 hectares have already been tapped and 626 numbers of rubber rollers have been distributed to the deserving beneficiaries. The state government intends to now cover an additional 8,280 hectares that is mature for tapping to encourage farmers, it added.

Offering potential generation of revenues and resources, the chief minister presented new taxes on heavy machinery and equipment, as well as increased rates of tax on petroleum products. The new rates will become effective from February 15 midnight. “This is an urgent need for the state in view of the slow economic growth and shortage of resources for developmental activities,” he added.

Duty on petroleum products is being enhanced from 10% for diesel to 14.5% and from 20.38% for petrol and other motor spirits to 25%. Road maintenance cess on petroleum products is being raised from INR 1.50 paise per litre to INR 2 per litre, the chief minister said.

While assuring to make all possible effort to mobilise resources for its various activities, Rio also assured to streamline the revenue collection systems of the government in various sectors to enhance efficiency and increase transparency. Further, he urged citizens to ensure that they pay dues of the government such as power and water bills and various taxes to improve economic conditions.

Chief Secretary Temjen Toy, who was present at the press conference, highlighted that the base for generating revenue is “very narrow”. He added the government is concentrating to generate revenue through power and urban development.