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Nagaland in deep financial crisis; 2020-21 expected to close with Rs 2358.81 cr deficit

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Dimapur, September 23: Nagaland is facing deep financial crisis despite austerity measures as a result of shortfall in receipts of share of Central taxes and duties as well as poor revenue collection due to imposition of lockdown following the outbreak of the COVID-19 pandemic.
The financial issue confronting the State and the likely impact these will have on the activities of the Government was discussed in a State Cabinet meeting today, said a press release issued by the State Finance Department.
The Finance Department said out of an estimated monthly receipt of Rs 320.96 crores per installment as share of Central taxes and duties, the figure as reflected in the Union Budget of 2020-21, the actual receipts is only Rs Rs 263.80 crores, resulting in a monthly deficit of Rs 57.16 crores.
This amount was again reduced to Rs 240.47 crores since June 2020, and accordingly the monthly deficit has now risen to Rs 80.49 crores, it said.
The total deficit during 2020-21 on account of shortfall in receipts of share of Central taxes and duties alone comes to Rs 1080.13 crores. The negative impact is not confined to Central receipts only. Our own revenues have fallen by about Rs 38 crores a month below the budgeted amount during the period April-August 2020, the department said in a press release.
Given the present trends, the revenue receipts of the State are likely to witness a decline of Rs 1650 crores during 2020-21 against what has been budgeted, it said.
The FD said when the present Chief Minister had handed over the reins of the Government in 2013-14 the deficit stood at Rs 950.09 crores. However, it said by the time the present Government returned in 2018 the deficit had grown to Rs 1607.73 crores.
The Finance Department estimated that the current year 2020-21 is expected to close with a deficit of Rs 2358.81 crores as per budget estimates and this includes an increase of Rs 939 crore since 2014-15. This, the release said, is mainly due to various factors such as implementation of the last pay revision for State Government employees and payment of pending dues and liabilities to contractors following various Court judgments in their favour, leaving the Government with no alternative but to pay.
However, in view of the unforeseen developments caused by the pandemic, the year is expected to close with a much higher deficit than estimated, it feared.
Stating that the negative impact of the pandemic has been so widespread and pervasive that the Government has been compelled to adopt drastic measures to mitigate the negative effects of the fall in receipts to avoid a potential collapse, the release said some of the measures adopted include prorata cuts in the budgets of the departments, imposition of various austerity measures and mobilization of additional resources through imposition of COVID-19 cess.
The release also appealed to all responsible citizens to refrain from making “sweeping statements based on hearsay without ascertaining facts.”
(Page News Service)

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