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Outstanding now Rs.6000 cr: Therie
Dimapur , May 3(NPN):
Published on 4 May. 2010 1:46 AM IST
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Responding to the rejoinder by addl. C.S. & finance commissioner Toshi Aier, to his earlier statement, Congress member and former finance minister K.Therie slammed chief minister Neiphiu Rio for asking “someone” to do a clean up job.
On the figure of award by the finance commission to Nagaland, Therie thanked the finance commissioner for correcting his earlier figure of outstanding loans. Saying he was also “educated by the rejoinder” which corrected the outstanding amount to Rs.4900 crore, Therie maintained that the above sum, if added with the deficit of Rs.570 crore and Civil Deposits of the government of over Rs.500 crore, would result in a total outstanding of anywhere near Rs.6000 crores.
Therie in a statement said the addl. C.S. & FC had issued the rejoinder over comments he made without reading the actual texts of the 12th and 13th Finance Commission (FC) award to Nagaland.
He explained that fiscal management was to sustain the state’s economy, where good fiscal management result in enough resources to meet ‘rational requirements of the state’ and ‘bad management’ result in deficits.
Stating that loans were unavoidable as also debt servicing, Therie said loans were not just for spending but to build resources so as to repay. However, Nagaland’s loans have enlarged debt servicing, he said. Further, Therie said he was concerned with the huge debt servicing that would eventually consume the Non Plan revenue. According to Therie, the debt servicing amount could be around 30% of the total revenue and if added with more than 70% the budget as salaries, nothing would be left for Non Plan expenditure.
He also reminded that the state government cannot escape from the mandatory expenditures on power bills, basic maintenance and commitment for the 6th ROP.
On the rejoinder by the addl. C.S.& FC, Therie asked what was meant by the explanation, that 13% departmental charges were not diversion nor revenue receipts but adjustment in accounts on Non Plan expenditure of a department that was duly incorporated in the budget ?
Therie asserted he has never learnt that any expenditure or receipt head was adjustment in finance and accounts. Stating the adjustments were temporary and recoverable like Ways and Means Advance, Therie asserted there was permanent loss when 13% fund is diverted to revenue and then spent under Non Plan revenue expenditure head.
Stating that all receipts were taken into account under the head of either ‘Capital’ or ‘Revenue’, Therie said what he had meant was that 13% of capital diverted to Non Plan expenditure resulted in incomplete works and affected workmanship. He further asserted the GDP was grant and should not be taken in the GDP calculation.
Asserting that he has no issue about the government of India’s funding pattern, Therie said the 12th F.C. had lifted bar on loans while the 13th FC was “gracious” in raising the award by 84.40% over the previous 12th F.C. Therie said a comparative statement between the 12th and 13th FC awards showed that while the 12th FC award was Rs.7,453.41 crore, the 13th FC award was 13,744.20 crore showing an increase by Rs.6,290.79 crore or 84.40%.
He said even with the 84.40 % increase, the state blamed the 13th FC for having over assessed State’s Own Resources by Rs.33 crore and under assessed Non Plan by Rs.662 crore and ignoring the deficit of Rs.94 crore.
Therie said the Non Plan expenditure was the creation of the DAN government and not the 13th FC or Centre.
He said the finance minister in-charge was expected to know his own revenue and to spend it within its means.
Therie said rampant appointments, corruption and living beyond the state’s finance have led to the “unrecoverable financial trauma”, coupled with huge loans and all time high deficits, all which reveal that the finance minister was running the state’s finances without applying his mind.
He also said over and above “sheer fiscal mismanagement”, the threat on employees not to resort to strikes but “resign and go to court” was an expression of “frustration and unbecoming of the chief minister/finance minister”.
Therie opined that the chief minister could have at the most, advised the employees to take their grievances to the Anomalies Committee. He said since the finance minister and chief minister was responsible for managing the state’s finances with his own choice to head the finance department, he (FC/CM) was responsible for the financial crisis and instead of asking employees to resign, he himself should resign.

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