The 1437.87 Crore deficit budget of the state tabled in the ongoing Budget Session is yet another budget in the long history of the state's ever-increasing deficits annually. A state with a low population coupled with a predominantly salaried economy and citizens who still swear and expect the government of India to fulfil all the needs. One of the main reasons for those who opposed the granting of statehood to Nagaland was the size and the related issue of self sufficiency, that at present seems not unfounded. Thereby the political settlement allowed the state to have a special status among the other states in India which also included special economic packages that the newly created state would have.
The long years of militancy even after statehood due to the unending political problem was another factor that discouraged investments from outside the state and also curtailed the locally grown businesses from flourishing. Starting from the late eighties when the government of India with the change of guard at the centre, changed the funding pattern the state plunged deeper and deeper into debts annually. The focus in the region, especially with regard to armed groups, changed from the state to other neighbouring states. However the almost forgotten, Naga undergrounds started to surface all over the state with various Army operations running in the neighbouring states. Moreover the highest revenue generating department in the state at that time, the Excise department became more of an enforcer of the NLTP Act from 1990 onwards when the Act was passed and total prohibition enforced in the state. The blow to the state's economy was huge as the creation of environment and implementation of mechanism for better revenue could never be implemented and it still continues today. In 2003 when the NPF government took over the state was already running at a deficit of about 300 Crores and though the centre bailed out the state then the deficit still increases every year. Till the dissolution of the Planning Commission, almost 70 percent of the annual plan outlay was spent on salaries and pensions. So the state literally is unable to spend its allotted funds if it has to decrease the deficit. A far cry from what the pioneers of the state envisioned when the state was inaugurated.
The long years of lax government regulation especially on collection of tax and other duties in the state has also compounded the matter. Though there is very limited market transaction in the state especially in the hill areas, the foothill and the plain areas especially Dimapur is the gateway to many other states. The reason why none of the other railway stations in Assam other than Guwahati is able to compete with Dimapur railway station in terms of revenue. Unknown and untouched to the Nag tribals, the trading in Nagaland to other states is presumed to be quite high with many towns in upper Assam still dependent on Dimapur. However none of these is reflected in the collection of revenue. The current CAG report indicates that the revenue on sales and trade during 2015-16 is just Rupees 328.58 Crores only. The non tax revenue from sources like fees, penalties, income from PSUs etc. during 2015-16 was Rupees 253.61 Crores.
Unless there is a paradigm shift from the top to the bottom, the light is very faint at the end of the tunnel. The government may also have to initiate more professional taxes and also bring in some private institutions that generate above certain stipulated brackets under the its tax regime to give some room to breathe. More stricter enforcement for collecting tax is also required for those that are already in the taxable bracket. This will ensure that the people also are more accustomed to the culture of paying taxes resulting in a sense of ownership thus also ensuring better accountability of the taxpayer's money.
